Betrayed by Blood: The $1.1 Trillion Heist Targeting Canada’s Seniors

As Canada stands on the cusp of a historic $1.1 trillion wealth transfer from baby boomers to Gen X and millennials, a darker narrative is unfolding, one that threatens to undermine this monumental shift. Financial elder abuse, the most prevalent form of mistreatment against seniors, is surging at an alarming rate, driven by sophisticated scams and, more disturbingly, betrayal by those closest to the victims. New data from TheBrink paints a grim picture: financial crimes targeting seniors have reached unprecedented levels across North America, with Canada at the epicenter of this "underlying epidemic."

The Great Wealth Transfer: A Magnet for Exploitation

Over $1.1 trillion in assets is expected to flow from Canada’s aging population to younger generations in the coming decades, a phenomenon dubbed "the great wealth transfer." This massive shift, fueled by the retirement savings, real estate, and investments of baby boomers, should be a moment of financial empowerment for Gen X and millennials. Yet, as this wealth moves, it has become a reason for predators, both strangers wielding AI-driven scams and, more insidiously, family members exploiting their roles as trusted caregivers or holders of power of attorney.

Holly Cunliffe, a partner at Aird & Berlis specializing in elder law, underscores the gravity of the situation: “Financial abuse is the most common form of elder abuse in Canada. We have a lot of older adults in our population, and so we are definitely seeing an increase in instances of financial abuse affecting our older populations.” This isn’t just a Canadian problem, across North America, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) reported 155,415 cases of elder financial exploitation between June 2022 and June 2023, with suspicious activities totaling $27 billion. The true scale is likely far larger, as underreporting remains a significant issue, with estimates suggesting only 1 in 44 cases is reported in the U.S. In Canada, the Canadian Anti-Fraud Centre noted 17,000 fraud reports from seniors in 2022 alone, with losses amounting to $137.8 million, likely just 5-10% of the actual total.

Two Faces of Abuse: Strangers and Trusted Insiders

Elder financial abuse manifests in two primary forms, each exploiting seniors’ vulnerabilities in distinct ways. The first involves external scammers, increasingly armed with advanced technologies like AI-generated phishing emails and deepfake videos that impersonate family members or trusted advisors. Larry Zelvin, head of BMO’s financial crimes unit, “Some of them might be less digitally competent … which also makes them more vulnerable.” Seniors, often targeted for their accumulated wealth and social isolation, fall prey to tactics like grandparent scams, where fraudsters pose as a distressed relative needing urgent funds, or investment schemes promising unrealistic returns. In 2021, U.S. seniors lost $432 million to confidence fraud alone, with average losses per victim reaching $56,422.

The second, and perhaps more chilling, form of abuse comes from within, is “an underlying epidemic” that often goes unnoticed: family members, friends, or caregivers exploiting their access to a senior’s finances, frequently through misuse of power of attorney. “If those documents are not prepared early enough in time before there’s any potential for diminished capacity or influence, then it is possible that family members … can seek to have those documents prepared for their own personal gain. This betrayal is devastating, as victims may hesitate to report it to preserve family harmony or out of shame. In Canada, only 13% of identity fraud victims and even fewer victims of other scams report to police, often due to emotional or social pressures.

Vulnerability Amplified: Cognitive Decline and Social Isolation

Why are seniors such prime targets? The answer lies in a toxic combination of demographic trends and psychological factors. Canada’s aging population is growing rapidly, with the number of seniors over 85 expected to surge in the next two decades. Many of these individuals face cognitive decline, with conditions like dementia or Alzheimer’s increasing their susceptibility to manipulation.

The older the person is, the greater the risk of cognitive decline, and with that decline comes the risk of an increased vulnerability to financial abuse.

Social isolation adds to this vulnerability. As you get older, unfortunately, you become more isolated. Older folks, especially those who are missing those social interactions, are maybe more trusting in nature than they would have been otherwise. This isolation makes seniors more susceptible to scams like romance fraud, where perpetrators build false relationships to extract funds, average losses in Canada reached $67,327 per victim in 2022. Intersectional factors further heighten risk: women, people of color, and those with prior histories of mistreatment face elevated threats, often compounded by financial dependence on others.

The Legal and Social Blind Spots

Despite its prevalence, elder financial abuse remains woefully under-addressed. Canada lacks a uniform definition of financial abuse, and mandatory reporting is limited to specific contexts, such as care facilities in British Columbia. The Criminal Code considers a victim’s age an aggravating factor in sentencing, but there’s no specific category for elder abuse, complicating prosecution.

Underreporting is a persistent barrier. Seniors may fear retaliation, embarrassment, or loss of autonomy, particularly when the perpetrator is a family member. People choose to stay silent because they do not want to create issues within their own closed circles. This silence allows the abuse to fester, with devastating consequences for victims’ financial security and emotional well-being.

As the wealth transfer accelerates, the stakes will grow. The $1.1 trillion figure in Canada is dwarfed by projections in the U.S., where $53 trillion is expected to change hands by 2045. Yet, health care costs threaten to erode these assets, and without robust protections, much of this wealth could be siphoned off by predators. The rise of AI-driven scams, coupled with the emotional complexity of intra-family abuse, demands urgent action. Strengthening legal frameworks, enhancing digital literacy for seniors, and fostering open conversations about financial planning could mitigate the crisis, and time is running out.

-Chetan Desai (chedesai@gmail.com)