Current pandemic measures have dramatically changed how we interact with our friends and family. While physical distancing affects everyone, seniors are experiencing increased isolation and loneliness as friends and family are unable to visit in person.
Unfortunately, fraudsters see this as a prime opportunity to become a “trusted” friend in a senior’s life so they can take advantage of them or their retirement nest egg through fraudulent scams or unsuitable investments. Scammers use a variety of methods to target seniors, including emails, mail, phone calls and even in-home visits.
The danger of financial abuse is real. In a 2020 study conducted by the Alberta Securities Commission one third of Albertans 55-plus believe they’ve been approached with a potentially fraudulent investment scam through a co-worker, family member, friend or even a member from a club, group or organization they belong to.
Fraudsters use a variety of tactics to defraud seniors, including:
- Leveraging their trust and politeness to establish friendships quickly.
- Instilling fear that they will run out of money in retirement and burden their family.
- Exploiting current events like the pandemic to offer fake investments in cures and new technologies.
- Using high-pressure sales tactics.
- Promising high returns with little or no risk and exclusive opportunities.
- Unsolicited investment opportunities and friend requests through Facebook and social media.
How can you help protect seniors in your life from investment fraud?
You can help protect your friends and family from investment fraud with open communication about their daily lives and financial decisions. Calling them routinely can help reduce social isolation and disrupt any suspicious activity that might be happening. If you believe someone you know might be at risk, be proactive and do the following:
- Bring up the topic of investment fraud. Share the dangers of investment fraud during this time and send them information specifically created for seniors.
- Listen and be engaged. Be open to discussing issues or topics regarding their finances and help them check the registration and history of any individual or firm offering them an investment opportunity.
- Pay attention to their social circles. Have they been mentioning a new friend or someone who has started providing them advice, financial or otherwise? Ask questions respectfully and monitor any ongoing suspicious activities.
If you suspect you or someone in your life may be involved in a potentially fraudulent investment scheme find help and more information at checkfirst.ca.
The COVID-19 pandemic has impacted lives around the world, including families across Alberta and especially seniors, who are isolated from support groups. The recent volatility of the markets, coupled with potentially lost retirement savings and social isolation, has created an environment of fear, uncertainty and vulnerability. Unfortunately, this is exactly the environment that scam artists prey upon.
As COVID-19 continues to spread, associated scams are emerging as scam artists exploit the crisis to profit from people’s fears, uncertainties and misinformation.
There are many types of fraud popping up during COVID-19. One example includes phishing and malware scams where scammers pose as governmental agencies, national or global health authorities, and send phishing emails or texts designed to trick people into downloading malware or providing personal identification and financial information. They can appear to be real, but err on the side of caution and think carefully before providing anyone with this information.
Another common scam are pump-and-dump schemes involving publicly traded small “shell” companies. Scam artists will ‘pump’ up the company’s value by enticing investors to purchase stock with inflated or false claims, then quickly ‘dump’ their stock before the hype ends. This results in a substantial payout for the scam artist while all the remaining investors lose their money. Often pump-and-dump schemes can be related to companies claiming to have products or services that will prevent, detect or cure COVID-19 infection. Be cautious of any claims that a company has a solution to help stop the coronavirus outbreak.
There are multiple ways that scam artists will target an individual. According to a 2020 study conducted by the Alberta Securities Commission (ASC), some of the most common ways Albertans 55+ years of age believed they were approached with a potentially fraudulent investment scam were:
- Through a friend, neighbour, co-worker or family member, or from a member of a club, group or organization they belong to (32%)
- By a stranger calling over the telephone (22%)
- From email spam (23%)
When considering investing in any opportunity, always read the fine print and research the investment – no matter how the opportunity was presented to you. Keep in mind that fraudsters often exploit the latest crisis with the COVID-19 outbreak being no different. Don’t be lured in by promises of easy returns – more likely you’ll be asked for money upfront that you’ll never see again. Also remember that anyone selling investments needs to be registered with provincial securities regulators to do so. For more information on how to recognize and avoid these scams and to check the registration of any individual or firm offering you an investment opportunity, visit the Alberta Securities Commission’s website: Checkfirst.ca.