Canadians lose millions of dollars every year to fraud, many of them are older.
Imagine a 71-year-old retiree who falls for an online scam and loses every cent of his entire RRSP and other savings.The magnitude of this loss would put his entire financial future at risk.
It can happen: According to the Canadian Anti-Fraud Centre (CAFC), in 2022, the elderly population lost more than $137.8M that year to scams, showcasing how this group of Canadians continue to be a prime target for fraudsters.
If you or a loved one has fallen victim to a financial scam, the very first thing to do is immediately report the crime to the CAFC and the police.
Losing a retirement nest egg
Losing your retirement nest egg due to a scam can be financially devastating. Facing the situation head-on can help you right the ship.
For starters, stop the bleeding. When you discover you’ve fallen for a scam, do your best to mitigate the damage. Stop any additional funds from leaving your bank account.
Depending on the situation, you may actually recover some of the funds with the help of the authorities and your financial institution.
If you don’t have any luck through reputable channels, don’t fall for a recovery scam, which promises to help recoup your funds but actually steals more money from you. If someone asks for an upfront fee to help you recoup your funds, it’s likely a recovery scam.
When you’ve exhausted your recovery options, the only thing to do is move forward. Luckily, there are still some strategies to help regain your financial stability.
Concrete steps you can take
Start by exploring your Canada Pension Plan (CPP) benefits. For eligible seniors who haven’t applied for CPP benefits yet, it might be the right time to tap into this monthly income. Although CPP income alone likely won’t replace your savings, it can help you cover your needs.
Beyond CPP, you can also tap into Old Age Security (OAS), another guaranteed benefit provided by the federal government and can provide some necessary extra income.
You should also look into senior support programs available through local nonprofits. For example, some might offer packages of nutritious food or healthcare support, both of which might help you stretch out your budget.
Don’t overlook the possibility of returning to work in some capacity. Although you might not feel up to a full-time position, you might take on part-time or remote work to bring in a supplemental income. When combined with your CPP benefits, it might be enough to help reorient your retirement finances.
Finally, losing your nest egg might mean you need to reevaluate your retirement plans. For example, if you were planning to move to a more expensive area, staying put might be a viable option now.
Or, if you have a large home with lots of equity, you might consider downsizing in order to lean on that hard-earned equity during your golden years.
How to protect yourself (and your loved ones) from elder fraud
Falling for a scam can come with serious financial consequences. As more retirees manage their finances online, getting familiar with common scams can help you protect your assets.
According to the CAFC, investment scams is the costlier form of fraud perpetrated against seniors, at $78.7 million in 2022 alone. In this scenario, an elderly person falls victim to a fake get rich quick or investment decision based on misleading information. A scammer may try to get you to buy digital currencies such as crypto, stocks, bonds, or real estate or to invest in a business directly.
The Competition Bureau cautions Canadians to be aware of these four warning signs:
- Claims of making a lot of money with little or no risk
- A person giving you a “hot tip” or revealing that they have insider information
- Feeling pressured to make a decision on the spot
- The seller isn’t registered with the provincial securities regulator
Romance scams are another common pitfall. When an elderly person starts an online ‘relationship’ with a scammer, it often ends with the victim forking over funds to solve a problem for their purported partner.
When you spot a scam or think you’ve spotted a scam, discontinue all communication with the fraudster.
If you aren’t sure whether or not something is a scam, ask others for their opinion. If possible, ask someone, such as a child or a younger relative, for their opinion. In many cases, someone from a younger generation can help you quickly uncover a scam.
If someone isn’t available, consider calling the CAFC at 1-888-495-8501. The agents can help you determine whether or not something is a scam.
Sources
1. Canada Anti-Fraud Centre: Canadian Anti-Fraud Centre: Annual Report 2022 (2023)
2. Competition Bureau: Investment frauds
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
