Why Are Older Canadians More Susceptible to Fraud?

How We "Grow to Trust" As We Age

Marsha was growing increasingly uneasy with her mother's finances. Based on bank statements Marsha was able to examine once a month, money was disappearing from her mother's bank account more quickly than it should have.

Marsha's mother Edith, 84, lived alone in an old beach house overlooking the sea in White Rock. Marsha lived in Qualicum, on Vancouver Island—at trip to visit her mother took at least five hours on a good day.

An only child, busy with her career as a realtor, and with her family on Vancouver Island, and unwilling to brave the overnight journey to White Rock more than once a month, Marsha did what she could to help manage her mother's doctor appointments and finances.

On monthly trips to White Rock, Marsha took her mother to doctor appointments and to the bank, as well as grocery shopping. But, when Marsha wasn't there, which was most of the time, Edith relied on a large circle of friends she had made in White Rock's art community to run errands and get food for the refrigerator.

And that's where the trouble began.

"Edith would 'tip' or essentially pay people to run errands for her, and this tip didn't include gas for the car," says Marsha. "Sometimes her friends would provide real help, such as weeding and watering her large garden. But a lot of the time it was asking people to go take her to the store to buy groceries."

What was merely annoying at first to Marsha was that whenever she visited Edith her refrigerator was crammed with food—more than Edith could possibly eat in a month. Marsha wondered why Edith's friends could not point out that she didn't need any more food.

Marsha also started to wonder how much money these "tips" might actually be. Money was draining from Edith's account faster than it should have. Edith had few expenses, and the ones she did have, such as utility and property tax payments, were easy to track.

Just how much were these "tips," anyway?

It was quite a shock when Marsha discovered her mother had written a personal cheque to one of her "friends"—someone Marsha had never heard of―for $500.

"He always drives me to the grocery store and makes sure I'm fed," Edith had said. "When he said he needed a small loan to pay the rent I really couldn't refuse."

Marsha realized she had a problem. Edith's trusting nature was allowing just about anyone to take advantage of her.

We "Grow to Trust" As We Grow Older

It's generally understood that people "grow to trust" as they get older. As people age, positive experiences over a lifetime make people less suspicious and more willing to overlook mistakes.

Later in life we may be more likely to see the best in other people and forgive the little letdowns that got us so wary when we were younger.

On the good side, the result of learning to trust others is more happiness as we age, and a greater quality of life in our later years.

But a trusting nature in later life can have a dark side.

Researchers have observed that older people may not be able to identify visual cues that suggest a person may be untrustworthy. It's a neurological change that occurs in the brain's insular cortex as we age. The insular cortex is responsible self-awareness, cognitive functioning, and how we experience interpersonal relationships.

Older adults are still adept at identifying people judged to be trustworthy or neutral, but much more likely to miss signs of those who may be untrustworthy.

This neurological change, combined with a bias towards positive emotional experience (often called the "positivity effect") keeps older people from recognizing negative cues and from keeping safe.

Fraud: the Number-One Crime Experienced By Older Canadians

This sort of cognitive decline provides some very real risks for seniors, and challenges for their adult children and other family members who want to keep them safe.

Fraud is the number one crime experienced by older Canadians. According to the Canadian government, financial abuse of a senior involves the misuse of an older adult’s money or belongings by a person the senior trusts.

Fraud can also occur as part of an ongoing relationship, and this was exactly what Marsha noticed was happening with Edith.

The "tips" Edith was paying for help running errands that, like buying groceries for an already overstocked fridge, didn't really need to be done was relentlessly draining her bank account.

Calling On Professionals to Provide Help

Marsha contacted her mother's credit union, as well as a lawyer for advice. The quickest way to protect her mother's finances would be for Edith to gain power of attorney over her mother's accounts.

After that happened, her mother's financial resources could be partitioned and firewalled, making it more difficult to withdraw larger sums of money. The lawyer also suggested incapacity planning that included an enduring power of attorney, giving Edith greater control and oversight of her mother's finances.

Marsha also realized that her mother needed some kind of personal home care—a professional caregiver who would be tasked with grocery shopping and cooking, and also helping run the errands that Edith's "friends" had been doing for her… while draining her bank account.

Most importantly, a health care worker would provide Edith with some sort of companionship based on trust.

Marsha, while continuing to work as a realtor selling homes on Vancouver Island, could also count on there being someone in White Rock she could trust who was caring for Edith and keeping an eye on things.

So while it was a nasty shock to discover her own mother was a victim of fraud, Marsha was able to take steps to deal with the problem, while helping Edith maintain her independence living at home.

Resources for Identifying and Helping Prevent Fraud

It’s all part of keeping records centralized, so the adult child will know where to go in the event something happens.

The BC Security Commission’s Fraud Aware site is an excellent place to get information about fraud, and to find resources to help you if you have been a victim of fraud, including:

There is also a useful link to report investment fraud.