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Legal Approaches to Preventing Senior Demographic Fraud

By December 21, 2024June 21st, 2026No Comments

Analyzing the Effectiveness of Legal Frameworks and Policies in Combating Elder Financial Abuse

Ruhani Kaur, Matthew Mollicola, and Thomas Shvekher
Gal Senior Care Foundation | Download the full paper here
14 September 2024

Introduction

According to the World Health Organization ‘elder abuse’ is characterized as “a single, or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person.” This definition enlightens one with the complex and deeply personal nature of elderly abuse, largely occurring in an environment where trust is expected.

In an ideal world, senior citizens are respected and treated with dignity. However, reality often contrasts with this belief. Aging is a natural process, and as people age, their bodies slow down, they become more prone to cognitive impairments, and they endure the various effects of aging. This makes elderly individuals more vulnerable in certain situations. Unfortunately, this vulnerability is often exploited by others for personal gain. Canada has become a prime target for fraudsters and scammers. The Canadian Anti-Fraud Centre (CAFC) recorded a significant increase in losses to fraud, from $383 million in 2021 to $530.4 million in 2022, and $569 million in 2023 (Bloom). Given this rising trend and the inherent vulnerability of seniors, they often fall victim to these fraudsters.

Although Canada has laws to protect seniors, there are no specific legal provisions that address financial fraud targeting this demographic. The implementation of stronger legal frameworks could empower the elderly to better combat these crimes. Additionally, these laws could weaken fraudsters, thus reducing the prevalence of these crimes.

Challenges Facing Seniors

The Canadian population consists of 19% senior citizens as per the report by Statistics Canada in 2022, and this percentage is only increasing with time. Given that such a significant portion of the population is elderly, it becomes only dutiful to speak for them and amplify their voices as the issue often gets pressed amongst those considered more essential

One might ponder the reasoning behind seniors being much more vulnerable to such crimes and may only think of aging as the culprit. However, there are multiple facets attached to the reasoning of this. The most prominent reason is the evolution of new technology- occurring every few years.  Lack of digital literacy as technology continues to change and grow, might make it difficult to adapt to it or seniors might not be familiar with online financial systems. Additionally, most of the frauds take place through online platforms (online scams, suspicious websites, fraudulent phone calls, phishing attempts, identity theft, etc.)

Furthermore, Isolation and Loneliness also account for making the elderly more vulnerable to scammers- who exploit their loneliness. Many seniors live alone and become easy prey for scammers who exploit their need for social connection by building trust or emotionally manipulating them. In addition, seniors who rely on family members or friends to manage their finances may hesitate to report abuse, fearing they will lose their financial independence. All these reasons paired with the complications that arise with aging (cognitive decline, physical disabilities, etc.) make seniors particularly susceptible to financial exploitation.

Legal Protections in Canada

The role of government action and legal protections is critical in safeguarding seniors. The Canadian laws for financial fraud to protect seniors fall into various areas, such as criminal law, consumer protection, and financial regulation. ‘Section 380 of the Code states that if you are found guilty of fraud over $5,000 it will be treated as an indictable offence with a maximum penalty of 14 years in prison. If the fraud exceeds $1 million, the minimum penalty you can face is two years in jail. If the alleged fraud is valued at less than $5,000, the Crown has the option of treating the charge as a summary conviction with a less severe penalty imposed’ (Elder Abuse Laws in Canada). Although Section 380, has punishments for financial crimes, it does not take into account the age of the victim, and the additional impact of it on an aged individual.

Another law not specifically for financial abuse but protects elders by taking into account their age and whether the crime involved a breach of trust as aggravating factors during sentencing. This can result in harsher penalties for those who commit fraud against seniors (under Elder Abuse, Section 718.2).  There are also Provincial Consumer Protection Laws unique to each province, aimed at preventing unfair business practices and protecting consumers, including seniors. It can enforce penalties against fraudulent businesses. These laws allow for penalties against fraudulent businesses, but the absence of laws specifically addressing financial fraud against seniors remains a significant gap in Canada’s legal framework.

Comparative Analysis of Elder Financial Abuse: USA, Canada, Australia

  I.    United States: Elder Justice Act (EJA)

The Elder Justice Act (EJA), enacted as part of the Affordable Care Act in 2010, stands as the first comprehensive federal legislation in the U.S. aimed specifically at addressing the abuse, neglect, and exploitation of older adults. Key provisions of the EJA include:

  • Establishing a national framework for elder abuse prevention, including funding for state-level initiatives.

  • Promoting the development of effective responses to elder abuse, neglect, and exploitation.

  • Encouraging the training of personnel in various sectors (law enforcement, social services, etc.) to recognize and respond to elder abuse.

The EJA’s focus on financial exploitation aligns with the rising concerns about elder fraud, as exemplified by the substantial financial losses reported by older adults in recent years. This federal legislation empowers states to enhance their legal measures, leading to a more cohesive and supportive environment for the elderly.

  II.    Australia: Aged Care Act 1997

Australia’s Aged Care Act 1997 provides an indirect approach to elder financial abuse by focusing on the overall rights of aged care recipients. This legislation includes provisions for:


    • Protecting the rights and dignity of older Australians receiving aged care services.

    • Ensuring that service providers adhere to standards that prevent exploitation and neglect.

However, similar to Canada, the Aged Care Act does not specifically target financial abuse. Instead, it creates a framework that indirectly addresses the issue by safeguarding the rights of seniors within the care system.

While Canada and Australia provide certain laws that may impose penalties for financial fraud, they do not specifically cater to the needs of seniors, thus limiting their effectiveness. The EJA in the U.S. provides a comprehensive legal structure aimed directly at combating elder abuse, including financial exploitation. This empowers states to enact specific laws and regulations to protect seniors. Therefore, making laws in the U.S. more effective.

Case Study: The Brooke Astor Case

The case of Brooke Astor, an American philanthropist and author, shines a light on how complicated and long, or better said, Kafkaesque, the process of recovering financial fraud funds is. The complexities of the Brooke Astor case arrived when her only son, Anthony Marshall, and his lawyer, Francis X. Morrissey, Jr. manipulated an elderly, and dementia-suffering Astor to sign a series of codicils (modifications) to her initial 2002 will, allocating more money to himself than originally planned. After her passing in 2007, it took 5 years, and tens of millions of lawyer fees to properly decipher how Astor’s will money should be properly divided. It should be noted, however, that this likely would not have been the case were it not for Brooke Astor’s high-profile status in New York. One Forbes article on the case of Astor suggested that not many prosecution offices have the time or resources to dedicate themselves to senior fraud cases – though it also highlights that the annual exploitation of seniors out of their money may be as high as $5 billion.

Astor’s story makes clear the fact that there is a lack of tools and infrastructure set in place for the elderly to retrieve stolen funds. Worst of all, the methods by which scammers most often fraud elderly out of their money are usually those that do not fall within the restrictions of most banks to allow for a fraudulent-related refund, according to an Aura article. Hence, it is rational to conclude that the first line of defense against financial fraud for the elderly, and the general population, should be education. Increased attention and funding to educational resources and programs catered towards the elderly population concerning noticing and avoiding financial fraud may well be the very small price needed to be paid to save billions of stolen dollars every year.

Conclusion

Our analysis reveals that while Canada has made strides in creating legal protections, it still falls short compared to more comprehensive frameworks, such as the Elder Justice Act in the United States. The complexities surrounding elder financial abuse, highlighted by the case of Brooke Astor, underscore the urgent need for more robust legal measures and resources dedicated to protecting seniors. As our population ages, the percentage of seniors will only increase, making it imperative that we address this growing concern with urgency and effectiveness.

To combat elder financial abuse, we must prioritize education and awareness programs tailored for seniors, equipping them with the knowledge and tools to recognize and resist fraudulent activities. Strengthening legal protections and enhancing educational outreach can create a safer environment for our elderly population, ensuring they are treated with the dignity and respect they deserve.

Works Cited

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