As Calgary recognizes seniors' week, the Alberta Securities Commission has released 10 tips to help the elderly to protect themselves from investment fraud.
Seniors are specifically targeted because scam artists know seniors are often home, are more likely to pick up the phone, and will be concerned about being rude and saying "no."
"These shysters, they have a magic tongue," said Luanne Whitmarsh, CEO of the Kerby Centre. "Every person that I've ever spoken to that has been caught in these situations, they go, 'I didn't see it coming.'"
Seniors duped four common scams:
- Affinity fraud involves a trusting relationship among friends, family or a group where elderly people are lured into a business idea and lose their money.
- Online pop-ups.
- High-pressure investment seminars.
- Stranger cold-calling.
Whitmarsh said she has seen the devastation of investment fraud firsthand.
"They hit an emotional rock bottom, it's like, 'What do you mean, I was taken? I thought I was better than that.' And then they go through not just the financial devastation, the emotional attachment to that devastation. It rocks their world."
Tips to avoid investment fraud:
- Don't be a victim of your manners — it's okay to say "no."
- Check out strangers touting "strange" deals.
- Always stay in charge of your money.
- Don't judge a book by its cover — scammers often appear legitimate.
- Watch out for salespeople who prey on your fears to convince you to hand over your money.
- Don't make a tragedy worse with rash financial decisions.
- Monitor your investments and ask tough questions.
- Look out for difficulties retrieving your principal or cashing out profits.
- Don't let embarrassment or fear keep you from reporting investment fraud or abuse.
- Beware of "recovery room" scams — they often overpromise to recover funds lost in the initial bad deal.
Mark Dickey with the Alberta Securities Commission says while many fraud victims will feel ashamed, it's best to come forward and report schemes.
"We would look into it to see if these people have broken the law. We could remove them from the market, the police could look at it to see if they've broken criminal law. There might be charges to be laid. Depending on how the scam took place, perhaps we could talk to the bank, see if we could claw back some of this money."
Dickey also recommends visiting checkfirst.ca.