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Canada has a robust protection plan in place to protect consumers from investment fraud, yet it still occurs thousands of times a year. It’s a sad fact that no group is more widely targeted for investment fraud than seniors.
A public enquiry conducted by CBC found that 75% of seniors report having experienced misleading or aggressive sales tactics. The Canadian Anti-Fraud Centre released a report in 2018 outlining the top 5 forms of fraud among seniors (age 60+) based on the number of complaints they received. The types of fraud that topped the list are
- service-tech support scams,
- personal information, and
- fake prizes.
In terms of dollar loss, the number one scam was the romance scam (that is, when someone pretends to have romantic intentions towards a victim to gain access to their financial resources). This type of fraud led to losses of over $9 million among seniors, accounting for approximately 25% of all losses.
What can seniors do to protect themselves from this rampant form of elder abuse?
There are several key warning signs to be on the lookout for:
It sounds too good to be true
Most investments, over time, will produce modest gains. At times, one can get lucky in the stock market and earn more than 20% over the course of a year. However, over time outsized results are fleeting, and anyone promising you a too good to be true return, even if it is someone you know, is not to be trusted.
You feel pressured by the sales tactics
Seniors have good instincts and should never be afraid to follow them. If you feel uncomfortable when someone is telling you about an investment, it is time to leave. Investment decisions do not need to be made right away. If it is truly a good investment, it will be there tomorrow.
Unsolicited investment advice is bad advice
An unsolicited phone call or email asking you to invest should be a warning sign to hang up or delete. The only purpose of those contacting you is to make money for themselves, not you. Reputable investment companies do not cold call clients or send solicitation emails.
Family or friends are pushing you to buy
There is nothing sadder than reading a news story about how a family member, caregiver, friend or romantic partner has defrauded a senior. Nevertheless, it is an all too common occurrence. While it is appropriate to talk over your financial affairs with family or friends, be wary of unrequested or unwanted advice or pressure on you to invest.
What can a senior do to protect themselves?
- Get information: Each of Canada’s provinces has a security commission. In Ontario, it is the Ontario Securities Commission. The commission works to protect investors, foster fair and efficient markets, and contribute to the stability of the financial system in Ontario. At Alterna, we are also committed to protecting all of our members. Here is some more information on how we protect your financial wellbeing, and a link to our Senior Support Centre.
- Share your concerns: Never be afraid to talk to your family, friends, financial advisor or attorney before making an investment decision if you have any concerns. Trust your instincts and protect the assets you have worked so hard to achieve.
- Get reputable advice: At Alterna we’re here to help. Our financial advisors can help you build a portfolio of investments to help you reach your financial goals and keep your money safe.