Protecting Your Finances: How to Safeguard Against Financial Exploitation and Abuse

In Canada, financial abuse is the most common form of abuse among older adults¹, and fraud is the number one crime against older Canadians.² Financial abuse and exploitation are crimes that not only drain the hard-earned savings of older adults but can also strip them of their independence and dignity. Whether through high-pressure scams or manipulation by trusted individuals, the financial security of older adults is often more vulnerable than the rest of the population, making it more crucial than ever to stay informed and vigilant.

Financial abuse involves the illegal or unauthorized use of someone’s money or property, often through pressure or coercion. This can range from theft, such as cashing a pension cheque without permission, to more subtle forms like coercing someone to give money, change their will, sign financial documents they don’t understand, or provide unpaid support. Most often, the perpetrators are people close to the older adult, such as family members, friends, neighbors, or caregivers. On the other hand, financial exploitation can occur through fraud and scams. These can include, but aren’t limited to, identity theft, credit/debit card fraud, online scams, and phone and door-to-door scams.

What the evidence tells us

An evidence synthesis including 12 studies conducted in the United States found that approximately one in 18 older adults experience financial fraud every year. This frequency was found to be of significant concern. The most immediate concern is the threat to the financial security of older adults. There are also other important concerns that include the impacts on major depression, generalized anxiety disorder, lower subjective health ratings, and increased functional somatic complaints that can be brought about from financial abuse.³

Another evidence synthesis including 23 studies on different forms of abuse among older adults found that programs like daily money management services, financial literacy education, and legal guardianship can protect older adults from exploitation by ensuring financial stability, increasing awareness, and safeguarding assets. Regular audits, collaboration between financial institutions and social services, and empowering older adults to recognize scams and assert their financial rights are key strategies to prevent financial abuse and its associated mental health impacts.

Practical tips and safeguards for avoiding financial abuse or exploitation

Protect your personal information:

• Store sensitive documents (e.g., birth certificate, passport, or Social Security card) in a secure place. Avoid carrying them unless absolutely necessary.
• Never share your PIN, account passwords, or banking information. Cover your hand when entering your PIN at ATMs or store checkouts.
• Safely dispose of old bills, bank statements, or sensitive documents—shred them to prevent identity theft.

Be cautious online and over the phone:

• Avoid clicking on pop-up windows or responding to unsolicited emails, attachments, or links from unknown senders.
• Remember, banks or credit unions will not send requests for personal information via email unless you have initiated contact.
• Do not give out your credit card, bank account, or personal information over the phone, at the door, or online unless you are sure of the person or organization.

Stay vigilant against scams:

• Be wary of anyone asking you to send money, return funds they "accidentally" sent you, or make quick financial decisions.
• If a salesperson pressures you with a "time-limited offer," take a step back—high-pressure tactics often signal a scam.
• Before hiring contractors or service providers, request proof of identity, references, and verify them before agreeing to any work.

Make thoughtful financial decisions:

• Avoid signing contracts or agreements without sufficient time to review and understand them. Seek independent legal advice for significant decisions, especially those involving property or major financial commitments.
• Keep a record of money you lend or gift, clearly noting whether it is a loan or a gift.
• Exercise caution with joint bank accounts—funds in the account can be withdrawn without your consent by the other account holder.

Strengthen social and legal safeguards:

• Prepare a durable or continuing power of attorney to designate someone trustworthy to manage your finances if you are unable to do so.
• Stay socially connected by maintaining relationships with a variety of friends and family to avoid isolation, which can increase vulnerability to abuse.

Know where to seek help:

• If you suspect financial abuse, speak up. Abusers may try to manipulate you into believing the problem is your fault—it isn’t.
• Contact trusted community resources such as your bank, credit union, senior center, or even your doctor for guidance.
• Reach out to local law enforcement or Adult Protective Services if you need immediate assistance.
• Consider asking a trusted friend or family member to review contracts, agreements, or major decisions for an extra layer of protection.

By staying vigilant and informed, older adults can protect themselves against financial exploitation and safeguard their independence and resources.