When working as an advisor, Chris Buttigieg, senior manager, wealth planning strategy with Bank of Montreal in Toronto, would never have thought his clients would fall for a scam. That changed when an older client showed up one day with a printed email in hand.
“Here’s an example of a person walking in, that I never would have thought would take [a scam] seriously,” he says, “[yet he] was ready and prepared to sell his investments and wire the funds that same day.”
Senior Canadians are particularly susceptible to fraud, says Matt McGuire, national anti-money laundering practice leader with MNP LLP in Toronto, and often have losses one and half times more than those of younger people who get caught up in scams.
The North Bay, Ont-based Canadian Anti-Fraud Centre lists a multitude of scams that people, regardless of age, could fall prey to, from identity theft to lottery emails. One scam that is targeted at older clients is the emergency or “grandparent” scam, in which a con artist contacts a victim claiming to be a grandchild and that he or she is in trouble and needs money.
For advisors working with elderly clients, there are several red flags to signal that an individual may be a victim of fraud. In most cases, the biggest is a need for fast cash.
“The real focus for the perpetrator is speed, fear, and some sort of cash or cash equivalent instrument,” says McGuire. Advisors need to watch out for clients who unexpectedly ask for a quick withdrawal of funds, he says, particularly if that is out of character for the client.
Other signs of fraud include clients wanting to send the funds they have just withdrawn overseas, says McGuire, or well-off clients who are suddenly struggling to make ends meet.
As well, clients who are happier than usual but won’t say exactly why they feel this way, might in fact be in trouble. In most cases, scam artists give what clients believe to be good news —a supposed lottery win for example, or that they’re going to receive money for helping someone out, says Daniel Williams, senior call taker supervisor with the anti-fraud centre.
“The sign of a scam overall will be that the victim is quite elated,” says Williams. “It’s not a bad news type of situation.”
If you know that a client has wired funds to a scam artist, it must be reported to your compliance department and possibly the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), as securities dealers are required to monitor accounts that may be involved in fraud and money laundering, McGuire says.
In addition to reporting the incident to compliance and FINTRAC, McGuire says the anti-fraud centre and law enforcement, such as the Royal Canadian Mounted Police (RCMP), should also be informed.
What advisors should not do, says McGuire, is to take matters into their own hands.
“This is not the time to be a vigilante,” he says. “This is not the time to try and collect evidence on your own.”
By getting involved personally, you may put yourself in harm’s way, says McGuire, or you may taint the evidence in the case or cause the scam artist to run before the proper authorities can apprehend him or her.
This is the third article in a three-part series on working with elderly clients.