What We Heard Report: Financial Crimes and Harms Against Seniors

From: Employment and Social Development Canada

This report summarizes the discussions and views of participants during consultations. The views expressed in this report are those of the participants and may not reflect the official views of the National Seniors Council.

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1. Background

The Government of Canada believes that seniors have the right to age with dignity and free from financial abuse. It is therefore committed to improving the financial security of Canadian seniors by protecting consumers and addressing crimes that target seniors.

The National Seniors Council (NSC) was established to advise the Government of Canada, through the Minister of Seniors and the Minister of Health, on matters related to the health, well-being and quality of life of seniors. As part of the NSC's 3 year work plan (2018 to 2021), Ministers have asked members to examine and identify measures to reduce crimes and harms against seniors. The Council decided to focus on identifying measures to address 3 key categories of financial crimes and harms against seniors:

To inform its advice to the federal government on ways to reduce financial crimes and harms against seniors, the NSC undertook some engagement activities to hear from seniors, those who provide services to seniors, experts and federal officials. This report summarizes what was heard at these events.

2. Context

At present, there are no comprehensive studies on financial crimes against seniors that look at trends over time in Canada, and both survey and administrative data likely suffer from underreporting.Footnote 1 That said, available data suggest that many seniors are indeed at risk of financial crimes and harms. For example, a recent public inquiry conducted by the Canadian Radio-Television and Telecommunications Commission found that 75% of seniors reported having experienced misleading or aggressive sales practices.Footnote 2 Furthermore, a 2014 Statistics Canada survey revealed that retirees and near-retirees may be susceptible to financial abuse as a result of over-confidence in their financial capabilities.Footnote 3

According to the National Survey on the Mistreatment of Older Canadians, which looked at financial abuse committed by both individuals and service providers, the prevalence of financial abuse among seniors in 2015 could be as high as 2.6%, representing 244,176 older Canadians.Footnote 4 Administrative data on fraud based on police reporting from the Canadian Anti-Fraud Centre (CAFC) provide some sense of the main forms of fraud, as well as indicators regarding the victimization of seniors. In 2018, the top 5 forms of fraud among seniors (aged 60+) based on number of complaints were: extortion, service-tech support scams, phishing, 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), which led to losses of over $9 million among seniors, accounting for approximately 25% of all losses.

There is some evidence suggesting that the number of seniors victimized by Mass Marketing Fraud (MMF) and identity theft is gradually increasing. In 2018, for example, CAFC reported that 4,545 seniors (aged 60+) were victimized by MMF, and 1,597 by identity theft, accounting for 29% of all reported cases of fraud. The MMF-related loss alone reached over $26 million, and the combined loss was over $31 million (the overall total for all victims was just under $120 million). This represented an increase from 4,195 seniors victimized by MMF in 2014, with a total loss of just over $17 million.Footnote 5 At the same time, all age groups are affected by fraud, suggesting that this is an issue for which inter-generational solutions seem particularly relevant.Footnote 6

For the general population, the rate of police-reported incidents of total fraud in 2016, which includes general fraud, identity fraud and identity theft, was 14% higher than in 2015. At the same time, rates for identity fraud increased 16% and identify theft grew 21%. The increases are partly attributed to police-reported incidents of Canada Revenue Agency scams as well as a potential increased awareness of cybercrime in general. Additionally, the overall volume and severity of non-violent crime, as measured by the non-violent Crime Severity Index,Footnote 7 rose to 69.3 in 2016, marking a 2% increase from the previous year, mostly as a result of increased police-reported incidents of fraud.Footnote 8

3. Engagement approach

To examine the issue, the NSC hosted 3 engagement events (a panel discussion, a town hall, and an expert roundtable) and considered available data on the topic.

In December 2018, the NSC hosted panel on measures to reduce crimes and harms against seniors: Federal initiatives, during which federal government representatives presented and discussed current initiatives led by their respective organizations. A summary of these initiatives is included in Annex A.

In March 2019, the NSC hosted a town hall, which was attended by more than thirty members of the public, including seniors and community representatives. The objective of the town hall was to engage stakeholders to identify:

Town hall participants discussed the following questions:

Throughout the moderated discussion, participants drew upon personal experiences to: provide examples of financial crimes, scams and harms; identify compounding factors rendering some individuals at higher risk; discuss policies and interventions to reduce financial crimes; and identify the challenges associated with the complexity of reporting mechanisms.

In March 2019, the NSC also hosted a roundtable involving 17 experts, including academics, community and association leaders representing groups with a broad membership base, front-line workers who have developed or led promising initiatives, and leaders in fields relating to elder abuse and financial abuse of seniors. The objectives of the roundtable were to:

The roundtable consisted of plenary discussions and small-group breakout sessions. 2 keynote speakers, Josephine Palumbo, Deputy Commissioner of Deceptive Marketing Practices, Competition Bureau Canada, and Martin Franssen, Detective-Constable, Durham Region Police Service Major Crime Fraud Unit, set the context by presenting on their work and responding to questions posed by participants.

Information included in this report also reflects additional information and comments submitted to the NSC during the past months from participants in the engagement efforts. A list of individuals engaged by the NSC through this process is included in Annex B.

4. What we heard: Speakers' insights

Financial crimes and harms against seniors are perpetrated by different actors and assume a variety of forms. In some instances, it is a stranger targeting an individual. In others, it is someone known to the victim. The crimes may be perpetrated using different tactics and mediums, including through the internet, by telephone, door-to-door sales, the mismanagement of a joint bank account or abuse of authority under power of attorney privileges. There are also instances where groups and organizations put seniors' financial security at risk in various ways.

Deputy Commissioner Josephine Palumbo indicated that seniors are a prime target of financial scams, with fraud being the number one crime committed against them. The Competition Bureau estimates that only around 5% of fraud incidents are reported to law enforcement, which makes it difficult to gather evidence and intervene. Impediments to reporting include victims' embarrassment and a perceived low impact of reporting, particularly when losses are low in value. However, she noted that every reported incident of fraud helps. The key to prevention is reducing stigma surrounding victimization and educating consumers on how to identify and report fraud. Private and public sectors, consumer groups and law organizations must collaborate to combat fraud.

Detective-Constable Martin Franssen discussed challenges associated with fraud protection, prevention, law enforcement and vulnerability factors that challenge law enforcement and the courts when trying to hold parties accountable. He noted that some forms of financial harms tend to fall under civil law; others may be criminal while others may fall under both civil and criminal law. The latter situation tends to complicate an investigation. Given these complexities, a federal standard of training for officers involved in elder abuse investigations is required to ensure that police are equipped to assist victims regardless of the area of law.

Furthermore, a definition of what it means to be “vulnerable,” which could encompass some seniors, could be included in the Criminal Code. This could help ensure that this factor is consistently considered in sentencing perpetrators who commit financial crimes against seniors.

A key challenge to addressing financial crimes is that many victims are reluctant to admit or acknowledge their victimization. He also indicated that fraudsters often use sophisticated tactics to move money across borders, retarget victims, and make victims complicit in other crimes. These fraudsters may also be successful in tricking a victim into believing them over others, such as legal authorities, friends, family and other trusted sources.

Challenges in consumer protection are exacerbated by greatly varying rules and protections across provinces. Federal and provincial agencies need to work collectively to effectively address this issue. Detective-Constable Franssen suggested that some other countries seem better able to protect vulnerable people through adult protection laws, which could be considered for Canada and implemented through inter-jurisdictional cooperation.

Finally, Detective-Constable Franssen further discussed the fact that loneliness and mental health issues can cause susceptibility to fraud. Criminal investigators can benefit from the assistance of community partners, including those working in mental health and senior support organization, to promote social engagement with the common goal of protecting the overall wellbeing of the person.

5. What we heard: Engagement participants

A number of interconnected themes emerged from discussions at the town hall and expert roundtable on financial crimes and harms against seniors. Participants agreed that it is important to take an approach to preventing and addressing financial crimes that empowers seniors, respects their dignity and provides a balance between protection and autonomy. Some participants also warned against a paternalistic approach or spreading fear unnecessarily when raising awareness.

5.1. The range and sophistication of financial crimes and harms

Participants spoke of the vast range of financial harms that are perpetrated against seniors, from romance scams to aggressive door-to-door sales (for example, furnace replacements, heating ventilation, air conditioners, new bathtubs, and, more recently, high-tech solutions to reduce energy consumption), and online scams to telemarketing and various social media scams. Some of these tactics are employed across jurisdictions, making it difficult for law enforcement to address. Several seniors also noted that financial harm can occur at a systemic level (for example, when a company goes bankrupt and creditors are given priority access to the remaining assets before pensioners.) While these harms do not constitute financial crimes per se, they can lead to the loss of financial assets. Financial crimes perpetrated by people who are known to the victim can also take many forms, including those committed through abuse of authority under power of attorney.

5.2. Risk factors

Participants identified different factors that can make seniors at risk of financial abuse and various scams. Social isolation was seen as a key factor as scammers often prey upon the loneliness of seniors who are isolated and in need of basic human contact. Poverty and economic insecurity can also make seniors at risk. For example, seniors who are having difficulty affording medication, medical treatments, or household appliances can be lured by online or door-to-door scams promising a deal. Other factors that could render some older people more at risk include cognitive impairments. In some cases, seniors may be willing to overlook financial abuse perpetrated by a family member or someone they know because of their dependence upon that person. Effectively addressing financial abuse against seniors means taking into consideration the different factors that make some seniors more at risk than others.

5.3. Reporting and detection of fraud

Several seniors noted the challenges of reporting fraud as a result of multiple factors. If fraud is committed from outside of Canada, it can be nearly impossible to track and punish the perpetrator. In some cases, when fraud is committed in Canada, it is unclear whether it is a civil or criminal matter, and police may not be willing to invest resources into investigating it. Another challenge is reporting fraud to the very financial institutions through which deceptive transactions have occurred. Seniors noted that reporting fraud to financial institutions is typically a complex, multi-step process that may be difficult to navigate without help. Additionally, given that many scams occur online or by phone, they do not always leave an easily traceable trail. Low reporting rates are also a challenge, and as noted above, this may occur as a result of victims' embarrassment.

5.4. Regulation and penalties

Participants also noted that stronger corporate leadership and accountability by businesses could reduce harms. This could include imposing harsher penalties on aggressive and misleading sales practices, as well as taking more modest actions such as ensuring employees are given sufficient time to provide clients with information on different options available to them. It was suggested that some scams skirt the boundaries of legality and may require a stronger regulatory framework to deter scammers. Many participants felt that harsher penalties for scammers were required, as well as stricter regulations on private sector actors to prevent high-pressure sales tactics (such as mandatory “cooling off periods” offering individuals the right to opt out after a couple of days), overbilling, fraud and other potential harms.

In some cases, government collaboration across jurisdictions is required since consumer complaints are regulated by different levels of government. For example, while federal agencies and departments are responsible for enforcing legislation related to anti-competitive practices (such as deceptive telemarketing and misleading advertising) consumer complaints related to contracts, as well as credit reporting agencies and the practices of collection agencies fall under provincial and territorial jurisdiction. The financial sector, for its part, is regulated by the federal government, and the Financial Consumer Agency of Canada (FCAC) works to inform and protect consumers of financial products and services. Some participants felt that the federal government could play a leadership role by releasing a national policy statement condemning the victimization of vulnerable adults that could inspire the provinces and territories.

5.5. Sharing existing materials, building on existing capacity and supporting community groups

Many participants echoed the point that stakeholders such as community organizations and federal agencies have already produced quality tools and resources and many community organizations administer programs that mitigate some of the risks associated with financial crimes (for example, through social programs that reduce isolation and loneliness.) However, many groups are unaware of these resources and groups do not always have the resources and funding required to reach a wider audience. There was broad consensus that current resources and materials addressing financial crimes and harms are likely sufficient, but that more needs to be done to support groups so that they can share and disseminate them (including groups that already have platforms and networks to share tools). The Little Black Book of Scams by the Competition Bureau was cited repeatedly as a useful resource. Previous federal media campaigns on elder abuse were also mentioned several times as an effective tool. One additional tool that some participants mentioned would be welcome was a decision tree to support people who have been scammed so that they know and understand who to contact for help, depending on the type of scam they have experienced.

5.6. Education and raising awareness

Participants emphasized the importance of providing seniors, and Canadians at large, with public education on scams and abuse, as well as on their rights, in ways that are likely to reach them, including in-person, through community papers, and on local television stations that they are likely to watch (such as the Weather Network). Adopting different methods to reach different groups of seniors is also important. For example, some members of particular ethno-cultural groups consume foreign and foreign-language media more than domestic media. Participants also noted the importance of educating front line workers, as well as expanding the scope beyond health and social service workers to include those in retail and banking industries. Organizations that work with seniors at higher risk of loneliness and social isolation should also be engaged.

5.7. Research and evaluation

Participants (particularly at the roundtable) felt that more research and evaluation was required on the types of interventions that can prevent scams. This included evaluations of programs designed to foster behavioural change among seniors to ensure they are more equipped to recognize and avoid fraud. That said, with respect to the modest funding provided by the New Horizons for Seniors Program to mobilize community organizations, requiring community organizations to conduct detailed evaluations of their programs could be unreasonably burdensome and could lead to their demobilization.

6. Conclusion

These engagement activities provided an important opportunity for the NSC to hear the perspectives of seniors, representatives of seniors organizations and experts. Addressing financial crimes and harms requires interventions in multiple areas, including criminal justice, consumer protection, fraud prevention and detection, support to victims, and initiatives that empower seniors and build their financial skills.

While the Government of Canada has a leadership role to play in establishing and maintaining policies, programs and services that support seniors, other levels of government, community organizations and the private sector are vital partners in addressing financial crimes and harms perpetrated against seniors. Everyone has a role to play.

Annex A: Summary of federal initiatives

1. Criminal justice

The federal Criminal Code identifies various economic crimes, including fraud, theft and specific forms of wrongdoing such as misappropriation of funds by a trustee. It also prohibits offences related to assault, threats of harm, and other forms of violence (such as criminal harassment), as well as negligence-based offences such as failing to provide the necessities of life to individuals for whom one has a duty of care.

While elder abuse is not a specific category of crime, the Criminal Code requires a sentencing court to consider the age of the victim as an aggravating circumstance when an offence has had a significant impact on the victim given their personal circumstances. Other factors relevant to elder abuse that could be considered aggravating circumstances include whether: the offence was motivated by bias, prejudice or hate based on age, mental or physical disability; the offender abused their spouse or common-law partner; or the offender abused a position of trust or authority in relation to the victim.

2. Consumer protection initiatives

Code of conduct for banks

Banks are required to comply with the consumer provisions set out in the Bank Act. In addition, banks may sign on to voluntary codes of conduct and public commitments. The Financial Consumer Agency of Canada (FCAC) is responsible for supervising and enforcing banks' compliance with the legislation, as well as codes of conduct and public commitments.

FCAC is engaging with banks and seniors' groups to create a code of conduct to guide banks in their delivery of services to Canada's seniors. Working with stakeholders, FCAC will develop a code of conduct to guide how banks can best deliver their services to meet the needs of seniors, thereby ensuring that seniors can bank with confidence.

FCAC currently monitors the Canadian Bankers Association's commitment on Powers of Attorney and Joint Deposit Accounts as they relate to the prevention of elder financial abuse.

Budget Implementation Act, 2018, no. 2

The Government recently passed the Budget Implementation Act, 2018, no. 2 (which received Royal Assent on December 13, 2018) to continue to advance the rights and interests of bank consumers, including seniors, and to ensure all Canadians benefit from strong consumer protection standards in their dealings with banks. Ensuring that seniors can confidently use banking services reduces their vulnerability.

This legislation contains the following provisions to better protect vulnerable Canadians:

3. Fraud prevention and detection measures

Fraud Prevention Forum

The Fraud Prevention Forum (chaired by the Competition Bureau Canada), is comprised of nearly 100 public and private sector organizations that focus on fighting consumer fraud, including seniors. Through its partners, the Forum works to prevent Canadians from becoming victims of fraud by educating them on how to recognize, reject and report it.

Since 2004, the Forum has been organizing Fraud Prevention Month campaigns to increase awareness of fraud and promote confidence in the marketplace.

Canadian Anti-Fraud Centre

The Canadian Anti-Fraud Centre (CAFC) is jointly managed by the Royal Canadian Mounted Police, the Competition Bureau, and the Ontario Provincial Police. The CAFC is Canada's central repository for data, intelligence and resource material as it relates to fraud. Its primary goals are prevention through education and awareness, disruption of criminal activities, dissemination of intelligence, support to law enforcement and strengthening partnerships between the private and public sectors with the aim of maintaining Canada's strong economic integrity.

Report on Misleading or Aggressive Communications Retail Sales Practices

In June 2018, the Government directed the Canadian Radio-Television and Telecommunications Commission (CRTC) to launch a public inquiry to investigate the sales practices of large telecommunications companies.

The CRTC undertook consultations on the use of misleading or aggressive retail sales practices by Canada's large telecommunications carriers between July and November 2018. Particular consideration was given to vulnerable groups, including seniors. The Competition Bureau assisted the CRTC in light of their expertise and responsibilities regarding deceptive advertising.

The CRTC's Report on Misleading or Aggressive Communications Retail Sales Practices, released in February 2019, documents the prevalence of such practices; identifies existing consumer protection measures to address them; and recommends ways to strengthen these measures to empower consumers to make informed decisions about telecommunications services and to promote fair treatment of consumers by the Service Providers.

The CRTC found that seniors are more vulnerable to misleading or aggressive sales practices.

Canada Revenue Agency's outreach efforts to prevent and combat fraud

The Canada Revenue Agency (CRA) employs a number of communications activities year round to inform Canadians (including seniors) about fraud and scams, focusing on education to help them to recognize a legitimate communication from the CRA. Such activities include a webpage, videos, posters, media outreach and participation in local events by CRA regional communications, and digital advertising. On October 10, 2018, an information package for Members of Parliament (MPs) was distributed to MPs to help them work with their local community associations to raise awareness and protect citizens. A “Tax Tip” document was also distributed to media on October 23, 2018 to explain to taxpayers and media what they can expect if the CRA does indeed contact someone by phone, email or mail.

Planned activities include strengthening and formalizing communication partnerships; translating printable posters and tax tips into Hindi, Cantonese, Arabic, and Spanish; and increasing the frequency and scope of proactive outreach across the country.

New Horizons for Seniors Program

The New Horizons for Seniors Program (NHSP) is a federal grants and contributions program that supports projects that make a difference in the lives of seniors and their communities. Through the NHSP, the Government of Canada encourages seniors to share their knowledge, skills and experiences to the benefit of others. The Program's 5 objectives are to promote volunteerism, mentoring of others, raising awareness of elder abuse (including financial abuse) increasing social participation and inclusion and providing capital assistance.

Since 2016, NHSP has funded 34 projects with a focus on raising awareness of elder abuse. Of these, 7 had a specific focus on financial abuse of seniors.

Family Violence Initiative

The Family Violence Initiative brings together 15 departments and agencies to prevent and respond to family violence. The Initiative is led and coordinated by the Public Health Agency of Canada. The Justice Canada component of the federal Family Violence Initiative (FVI) provides project funding to support the development of models, strategies, and tools to improve the criminal justice system's response to family violence, including elder abuse. The FVI also addresses elder abuse, including financial abuse, by providing information and resources for professionals and the public, such as Elder Abuse is Wrong, a booklet for seniors who may be suffering from abuse by someone they know.

Research on abuse by the Public Health Agency of Canada

The Public Health Agency of Canada (PHAC) works to expand the evidence base about abuse against older adults. For example, PHAC funds research through the Canadian Longitudinal Study on Aging to better understand the psychological, physical and financial abuse of older adults in Canada. PHAC also shares knowledge and resources for professionals and the public on the Stop Family Violence web pages on family violence, including elder abuse.

4. Empowering seniors and building their skills

The Little Black Book of Scams

The Competition Bureau produces a guide entitled The Little Black Book of Scams, which outlines common types of scams, and lists the contact information of fraud-fighting agencies that are available to help. It also provides tips on how to stop fraudsters in their tracks.

Digital Literacy Exchange Program

Innovation, Science and Economic Development Canada's Digital Literacy Exchange Program announced in the 2017 Budget supports initiatives that teach fundamental digital literacy skills and help Canadians, including seniors, use digital technology and the Internet safely, securely and effectively.

Strengthening Financial Literacy of Seniors

Strengthening Financial Literacy of Seniors, a strategy by the Financial Consumer Agency of Canada (FCAC), includes a goal to increase the number of educational tools available to contribute to combatting fraud and financial abuse of seniors. FCAC provides consumer education materials related to fraud prevention, planning for retirement, and financial rights and responsibilities to help seniors make informed financial decisions. The agency also releases information on trends related to payday loans, home equity lines of credit, and long term automobile loans, and issues consumer alerts on fraud, scams, and sales practices.

Seniors Guidebook to Safety and Security

The Royal Canadian Mounted Police has produced the Seniors Guidebook to Safety and Security with tips on how to prevent and detect various forms of elder abuse, including financial abuse.

5. Victims support initiatives

Federal Victims Strategy

The Federal Victims Strategy (FVS), a horizontal initiative led by Justice Canada, seeks to give victims a more effective voice in the criminal justice system. The Victims Fund is available to provincial and territorial governments and non-governmental organizations to support projects that address the needs of victims and survivors of crime in the criminal justice system. The Victims Fund is currently supporting 7 projects led by non-governmental organizations to address gaps in support and services, raise awareness, or undertake research to benefit victims and survivors of crime with disabilities.

Through the FVS, Justice Canada also hosts knowledge building events relevant to elder abuse and supporting senior victims such as webinars.

Victim Services Directory

Justice Canada maintains the Victim Services Directory on its website for victims, service providers, family members or any concerned party to locate victim services according to geographical area or type of victimization, including elder abuse.

Canadian Victims Bill of Rights

During the criminal justice process, the Canadian Victims Bill of Rights grants victims of crimes the right to information, the right to participation, the right to seek restitution and the right to protection.

Office of the Federal Ombudsman for Victims of Crime

The Office of the Federal Ombudsman for Victims of Crime (OFOVC) is an independent resource for victims in Canada mandated to ensure the federal government meets its responsibilities to victims of crime. Victims can contact the OFOVC to learn more about their rights under federal law and the services available to them, or to make a complaint about any federal agency or federal legislation dealing with victims of crime.

In addition to its direct work with victims, the OFOVC also works to ensure that policy makers and other criminal justice personnel are aware of victims' needs and concerns and to identify important issues and trends that may negatively impact victims.

Annex B: Lists of participants

Panel on measures to reduce crimes and harms against seniors: Federal initiatives (Gatineau, Quebec on December 11 to 12, 2018)

Town hall participants (Winnipeg, Manitoba on March 21, 2019)

Moderated by Dr. Verena Menec, Professor in the Department of Community Health Sciences, Max Rady College of Medicine, University of Manitoba.

Expert roundtable participants (Winnipeg, Manitoba on March 22, 2019)

National Seniors Council members

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