The saga started when Rebecca saw a newspaper ad for a course on investing in real estate. She took the class, and then another seminar. Seduced by smooth talk and big promises, she sank her life savings – about $80,000 – into the company giving the courses.
The cash was supposed to go into foreign investments, including a tourist development on the Tobago coast. Rebecca was told to expect a fat interest cheque every month. But in the year after the seminars and the splashy Caribbean trip, she didn't see a cent or hear a word from the company. The people who had taken her money couldn't be found. Her $80,000 was gone – for good.
Infuriated, she tracked down other Canadians who had been bilked of big bucks by the same company, but most were too ashamed or afraid to go to the police. One victim, Rebecca says, killed himself. Another woman's husband left her. "I said to my husband, 'You haven't had a heart attack, we still have a roof over our heads, our marriage is still intact. Count ourselves lucky. Let’s just walk,'" Rebecca says. "So we did."
The vulnerable ones
Rebecca admits her story reads like a far-fetched movie script. But sadly for Canada's top fraud fighters, there's nothing shocking anymore about people, especially seniors, being smacked with supersized financial scams. "Some people have lost their entire life savings," says Cpl. Louis Robertson. "The most I have seen so far is $700,000. The lady was 84 years old." Robertson is an RCMP officer in charge of the criminal intelligence analysis unit with the Canadian Anti-Fraud Call Centre, also known as PhoneBusters. The Centre is flooded with more than 140,000 calls every year from consumers concerned about scams. Robertson estimates Canadians lost between $475- and $500-million to fraud in 2006.
Scams hurtle their way toward us every day in the form of letters, e-mails, phone calls and knocks at the door. And many of the people taking the biggest hits are those who can least afford it: The nanny and grampy getting by on a pension. The lonely widow living alone. Our moms and dads.
"I'm very annoyed" says Molly McCarthy, a 77-year-old widow living in a big old house overlooking the fishing boats in St. Martin’s, N.B. She once went to the police after someone in the United States started skimming money off her credit card for a subscription she had never ordered. She has also had her share of suppertime calls and letters from bogus charities trying to charm her into channelling change their way. "These are full-time professional and persistent crooks, and we, the public, are only part-time amateurs as we try to protect ourselves; it's not a level playing field."
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Bud McGinnis is just as irked – and he's fighting back. The 86-year-old retired research scientist in Ottawa is on a quest to fraud-proof others. As part of his volunteer work with the Rotary Club of West Ottawa, Bud works with a national program called the ABCs of Fraud. He takes the scam-busting workshop to seniors, church groups, clubs and other parties that contact him and want to learn how to avoid being ripped off. With straight talk, videos, skits and question-and-answer sessions, Bud gives people the facts they need to protect themselves from becoming targets. "Seniors are trusting and polite. Fraudsters and scam artists take advantage of these characteristics. Oftentimes [seniors are] at home most of the day and can answer the phone or the door. Many of them are lonely," he explains. "And when you have a lonely person and somebody with a big smile at the door, there’s a bit of a bond immediately. And then, of course, we [seniors] are slipping mentally and physically. So all of these factors come into play."
What to watch out for
• Snail mail scams. Plenty of scam artists skulk their way into seniors' lives via snail mail. There's the sweepstakes letter, for example, a glossy, official-looking document gloriously announcing that the addressee has won a ton of cash. The catch is that the individual has to send a fee to the lottery company before collecting the prize. The bucks never show up, of course, and the smoothest scammers sucker a senior into sending cheque after cheque. "Sometimes people actually think they won," says Marcy Ages, a financial planner with T.E. Wealth in Toronto. "If you have been living alone, it gives you hope."
Bud tells the story of a friend in her 90s who has accumulated a stack of sweepstakes letters saying she has won millions. A recent letter offering a $25,000 prize asked her to send a $40 fee. She was ready to take a chance and sign a cheque, but Bud talked her out of it. "I'm sure that had we not been there to counsel her, she could have been taken for quite a bit of money," he says.
• Phone fraudsters. These individuals are just as insidious, with their over-the-top promises of free trips to Vegas, fabulous cruises and big-money prizes. A typical caller, apparently experiencing paroxysms of excitement, will congratulate the person and then ask for a credit card number or other personal information. Again, up-front fees are usually presented as the key to glorious riches or dreamy vacations. "The rules simply don't allow that," explains Doug Simpson, president of the Canadian Council of Better Business Bureaus. "In Canada, for example, you can't charge up-front advance fees for those sorts of things. But probably the majority of people don't realize it."
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More types of fraud
• Cyberspace cons. If you think because your parents aren't wired up they couldn't get conned in cyberspace, it's time to reboot your perceptions about older people and technology. "They're all (on) broadband, cable modems, online all the way," says David Cravit, senior vice-president of marketing with the 50Plus Group, a Toronto-based company that publishes websites and an electronic newsletter for baby boomers and seniors. So-called phishing expeditions are reeling in plenty of victims. Scammers create cruelly convincing clones of websites, often of big Canadian banks. They then send e-mails instructing recipients to verify passwords and other banking information. "That's the one that worries me the most," says Cravit. "If they (seniors) are not on their toes, then they're going to type in their bank account number."
• Lure of the letter. Then there's the Nigerian letter scam, which is vacuuming millions from hapless victims around the world, including Canadians. An 84-year-old Winnipeg man was fleeced of more than $30,000 last year after falling for it. The con comes in the form of graciously-worded e-mails, ostensibly from people in Nigeria or other countries, offering whopping sums of money. In the Winnipeg case, the senior was promised a $1.5-million inheritance if he wired a total of $37,500. According to PhoneBusters stats, Canadians lost about $1.4 million in these letter scams in 2008. "It's really, really a sad thing to see," says Simpson, "because you know those people will never see that money again."
• At-your-door dupe. While the web is making it easier for fraudsters to milk seniors' bank accounts from afar, the old-fashioned face-to-face con is still on the streets. There's the contractor, for example, who knocks on your door, warns that your roof looks like it's about to collapse and offers to do the repairs for a cut rate. The senior hands over a cheque to cover supplies, the contractor leaves, and is never seen again.
• Breach of trust. Perhaps the most unscrupulous crook is the one in a position of trust in a senior's life. Some people are ripped off by their own kids, while others are victimized by employees. Financial planner Marcy Ages remembers an elderly client who paid the price for trusting a caregiver with her bank card. "This woman stole $20,000 from her. But because she gave her the PIN, how can you say she stole it? You could try taking the person to court, but then it's going to cost you lawyer's fees. And [the person] might not have the money to pay you back anyway if they've already spent it."
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How to help your folks
In some cases, seniors turn to their children for help straightening out financial affairs in the face of fraud. But many victims, ashamed to admit they have been duped, keep the fiascos secret. It has been seven years since Katharine lost her $80,000 in a real-estate scam, but many of the people closest to her don't know it happened. "My husband has four sons, and I have one daughter," she says. "We never told the sons. My daughter was aware, and her response was, 'Thank God I didn't have any money to invest.' She knew we lost everything. She could not help 'fraud-proof' us."
In this age of proliferating scams, what can we do to help protect Mom and Dad? How do you have "The Talk" with your parents without sounding like, well, a parent?
• Cut to the chase. "Don't be squeamish about this," advises Cravit. "Just approach it head-on." Robertson, the PhoneBusters fraud cop, also likes the direct approach, even with his own parents. "Dad is 79 and Mom is 80 years old," he says. "I sat down and explained to them the value of personal information to criminals and the problems it can cause them once compromised. People of all ages and sexes can be victims of fraud. Leave the lines of communication open to invite them to share any questions or concerns they may be experiencing."
• A more subtle approach. For those who don't feel comfortable barrelling into the topic of fraud, there are always more subtle methods. "When you're at your parents' house, you could just say, 'Oh, I read this article about this happening to somebody.' Or, 'I just got one of those e-mails. Do you ever get them?' And then you can naturally get into the conversation," suggests Ages. "The more comfortable your parents are with you, the more chance that they're going to tell you, 'This happened to me' or, 'I was wondering about this.'" Robertson adds that it's smarter to recognize the threat and deal with it. "We will have to change our habits," he says. "And quick."
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Who you gonna call?
• PhoneBusters, the Canadian Anti-Fraud Call Centre, can be reached at 1-888-495-8501.The group's website has up-to-date information about scams in North America.
• You can also contact the Canadian Council of Better Business Bureaus for your area or run a search on a company online at www.ccbbb.ca.
• Another option is to contact Equifax or TransUnion. These companies can provide you with a personal credit report and their websites have information about protecting yourself from fraud. Equifax can be reached at 1-800-465-7166 or www.equifax.ca and TransUnion at 1-800-663-9980 (1-877-713-3393 in Quebec), or www.transunion.ca.
• The ABCs of Fraud Program, which is run by several volunteer organizations, provides free anti-fraud workshops in cities across the country. To request a workshop in your area or become a volunteer for the program, contact the Saint John Volunteer Centre, the Seniors Resource Centre of Newfoundland and Labrador in St. John's, the Crime Prevention Association of Toronto, the Rotary Club of West Ottawa, the Rotary Club of Halifax or Age and Opportunity in Winnipeg.
• Trusted friends, family members and local seniors’ organizations can often help, too.
10 ways to scam-proof yourself and loved ones
If there's a grain of good news about financial fraud, it's that there are plenty of ways to avoid becoming a victim. "Unlike some other random acts of violence or crime, where you might not have that opportunity to protect yourself, here you can," says Michael Boudreau, a criminology professor at St. Thomas University in Fredericton.
Boudreau, Cpl. Louis Robertson of PhoneBusters and Bud McGinnis, an 86-year-old volunteer with the Rotary Club of West Ottawa who works with the ABCs of Fraud, offer their tips on protecting yourself and your parents from financial fraud.
1. If it sounds too good to be true, remember, it is.
2. Don't ever pay anything for a "free prize."
3. Never give out personal information on an incoming call.
4. Shred or otherwise destroy all personal papers before throwing them in the trash or recycling bin.
5. Don’t carry your social insurance card or any other personal cards you seldom use in your wallet.
6. Don't let anyone pressure you into making a quick decision.
7. Don't be fooled into thinking you will really get a big lottery cheque if you send an up-front fee.
8. If someone calls or comes to the door offering you a free prize but requiring some sort of advance payment, just hang up or shut the door. Emphasize to seniors that they need not worry about being impolite.
9. If you're not sure about a solicitation, go to your financial institution, police department or the RCMP and ask questions.
10. If you don't know whether you're dealing with a fraudster or a legitimate organization, start your homework with a call to your local police or research it on the Internet.
Avoid e-mail scams
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|This story was originally titled "Protect Your Parents from Fraud" in the May 2008 issue. |
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