You’d think that Steven Spielberg, the highest-grossing director of all time, would be immune to fraud. But you’d be wrong. The developer of Jaws, Jurassic Park, E.T.and many other films has wealth and status that provide him access to top financial professionals. But in 2008 that list included Bernie Madoff, a Ponzi-scheme operator who walked away with undisclosed amounts from the director’s private foundation.
Anyone can be scammed. However, according to the federal government, older Canadians are more likely to experience fraud than any other crime. “Phishing” and other online scams are among the most common. However, fast-talking salespeople, unscrupulous investment advisers and unethical day-to-day acquaintances, or even family members, are also of concern.
In recent years, charity-related, prize-winning investment and other scams have become increasingly sophisticated, often originating from someone in the family or a “trusted” friend.
Fraudsters are using social engineering – deception and manipulation of individuals so that they divulge personal data – as a way to encourage people to disclose financial information.
Fraudsters are using social engineering – deception and manipulation of individuals so that they divulge personal data – as a way to encourage people to disclose financial information. For example, the Royal Canadian Mounted Police warn of “grandparent” schemes, through which a scammer pretends to be a grandchild who needs help because he was recently arrested. The “grandchild” then provides the phone number of a fake lawyer or police officer with whom the victim is supposed to arrange bail. Romance scams, which target the growing number of older adults seeking love on the Internet, are also common.
“A lot of the older demographic, if they’ve experienced fraud, are embarrassed to go to their financial institution to talk about it: One, because they think it’s something they should’ve prevented, or they think it’s a big process that’s not worth the effort, especially when smaller amounts are at play,” says Siddarth Shetty, director, retirement strategy, personal savings and investments, Royal Bank of Canada.
He adds that financial institutions have a role to play in helping bridge this gap so that people know where to turn for help.
Pooling resources to fight fraud
Governments, individuals and businesses are increasingly innovating and collaborating to help reduce fraud and financial abuse.
This is particularly true of the big financial institutions, which got a wake-up call in 2013 after a Canadian bank settled with those targeted by Earl Jones, a non-practising investment adviser, who bilked investors out of more than $50 million.
In addition to constantly updating their own security systems and monitoring networks to guard against potential online threats, “banks have extensive security measures and procedures in place, including teams of security experts, to monitor transactions, protect customers, prevent and detect fraud, and maintain security at bank branches, ABMs and online,” according to the Canadian Bankers Association (CBA).
Indeed, if you have ever travelled outside the country, you know that monitoring customer bank and credit card accounts for signs of unusual activity is now par for the course, with warnings being sent via text, phone or email.
It’s a 24/7, 365-days-a-year effort. RBC, for instance, has more than 500 employees working on fraud management. The team is constantly using analytics to determine if something isn’t right, such as too-frequent transactions or the time of day in which a transaction occurs. In addition, client-facing staff are trained to look for changes in behaviour and other red flags that could indicate financial abuse.
For many, the greatest fraud threats aren’t necessarily those directed at them, but rather those that target family and friends, particularly those with cognitive decline.
“Caregivers are a big focus for us,” says RBC’s Shetty, who recognizes it’s a challenge to broach with a loved one the subject of mental faculties and managing finances as part of a larger effort to protect against fraud and financial abuse. “It’s not an easy topic. On our end, we’re helping our advisers with training and awareness around how to speak with these clients.”
Education is empowerment
In an effort to protect older Canadians in particular, the CBA runs a program called Your Money Seniors. According to Aaron Boles, the association’s vice president (communications), thousands of people have taken the course, which includes cash management, financial abuse protection and fraud prevention modules. The free sessions are delivered by banking sector volunteers.
Another strategy is to engage customers in the battle against fraudsters. RBC, for instance, has set up a service that enables clients to report fake websites masquerading as RBC company websites. The financial institution, like many others in Canada, also supplies a web page that provides information about how to identify and report phishing emails and fake websites.
Fraud protection starts with doing some research and leveraging the increasing number of resources that are available.
One of the few positive developments related to the pervasiveness of spam email fraud is that targets are learning to be careful. An Internet user who receives daily marriage proposals from nubile Russian women, or offers from Nigerian lawyers who want to help them claim inheritances from long-lost uncles, quickly learns to ask tough questions.
What advice would an expert give Spielberg?
So, what advice would experts give Spielberg, who recently turned 72 and, by virtue of demographic, is increasingly vulnerable to further scam attempts? Ironically, despite the breadth of the new trends, the best advice remains the most obvious.
“Don’t give out personal information,” says the RCMP. “Don’t send money to someone you have never met until you actually receive what you have been promised. Also, keep in mind that when an offer seems too good to be true, it probably is.”
“If they do find something that does feel suspicious to call us,” adds Shetty. “There’s always someone to provide advice or the guidance. We’re here for them.”
The good news is that the famous director, who is getting ready to do a film adaptation of West Side Story, has already likely learned those lessons – the hard way. The hope is that others can also learn from his experiences.
ADDITIONAL READING: Start the Conversation: Talk to Aging Parents About Future Care Plans Now.