10.5.2 Fraud that targets seniors

Why seniors are targeted

Scammers aren't fussy. They'll steal from anybody. But seniors sometimes make easy targets, for several reasons:

If seniors are close to retirement and aren't sure if they have enough money, they may be more likely to fall for promises of high returns.
Seniors may be lonely or isolated. Scammers take advantage of this by befriending the senior, and using this position of trust to steal the person's identity or money.
Seniors often belong to social groups like church groups and social clubs. Fraudsters gain the confidence of people in these groups and convince them to make what turn out to be fraudulent investments.
Seniors are likely to have some savings, to own their home and to have good credit, all of which make them attractive to con artists.
Seniors were generally raised to be polite and trusting. Scammers know that it is difficult or impossible for these people to say "no" or just hang up the telephone.
Seniors may not report frauds because they are too ashamed at having been scammed. They may also be concerned that relatives may think that they are no longer capable of handling their own financial affairs.
Con artists know that elderly people often make poor witnesses in investigations or criminal proceedings because of failing memories.

Elder abuse often involves investment or securities frauds, and these can occur in a number of ways:

Inappropriate investments: A scammer offers an investment to a senior that is fraudulent or simply unsuitable for the senior's risk tolerance.
Affinity fraud: Affinity fraud happens when a scammer gains the trust of a group and then talks members of the group into "fantastic, can't lose" investments. These scams often succeed because people are less likely to question advice that comes from people they know and trust.
Aggressive sales tactics: Scammers often target seniors through "free" investment seminars. They may not tell the seniors that the investments being promoted are risky. They generate excitement and pressure people to invest on the spot or to schedule a follow-up appointment.

For more information on frauds that seniors can fall prey to, see the Avoiding Fraud section on the Canadian Securities Administrators' website.