Are you helping an elderly parent with some holiday shopping and need to get reimbursed? Have they asked you to pay some bills or e-transfer funds to the grandkids from their accounts? You aren't alone.
Authors
- Celine Latulipe
Professor, Computer Science, University of Manitoba
- Zach Havens
Master's Student, Computer Science, University of Manitoba
While 70 per cent of Canadians age 65+ use online banking , older adults sometimes rely on people close to them to help with banking tasks. Our research, based on a survey of 42 participants, shows that older adults often share their banking passwords with trusted caregivers because banks have not provided a better way to allow caregivers to help.
Most caregivers are well meaning, honest and provide a valuable service to society by helping older adults with their banking. This practice, while convenient, puts older adults at risk for financial abuse. It has been estimated that at least 6.8 per cent of older adults have experienced financial abuse globally.
The need for better banking
It is important to help older adults age in place, meaning providing them with the ability to live independently and comfortably in their own homes as they grow older. Support with banking tasks is a critical component of this.
A 2019 survey found that 20 per cent of Canadians bank on behalf of someone else. Banks offer two mechanisms to enable caregivers to bank for older adults: trustee accounts and joint accounts.
Trustee accounts are appropriate when older adults lack decision-making capacity. A financial power of attorney gains complete control over the older adult's accounts. However, this is not suitable for independent older adults who only need occasional support with banking.
Joint accounts require adding a caregiver as a legal account holder. This is commonly set up for adult children of older adults. With joint accounts, each person has their own login credentials so the older adult doesn't have to share their password with the caregiver and the bank can see who makes each transaction.
Joint accounts are helpful in the event the older adult passes on - they allow the caregiver to pay bills and funeral expenses without having to jump through legal hoops.
However, joint accounts can be problematic because they assume joint ownership of assets , which means a caregiver could misuse these assets . In such cases, there is no protection or recourse for the older adult. Older adults may be unlikely to report such situations if they are dependent on the caregiver for support.
In addition, not all older adults have an adult child or other close family member, so joint accounts are sometimes inappropriate.
Risks of password sharing
Our survey study and interview study both showed that older adults often share their banking passwords with their caregivers so they can pay bills, monitor balances, transfer funds or send e-transfers.
Password sharing can be problematic for a host of reasons. First and foremost, it puts the older adult at risk of financial abuse. Password sharing can open the door for caregivers to take extra money for themselves or use the older adult's accounts to pay their own bills .
When an older adult shares their password, a bank can't tell whether it's the older adult making transactions or their caregiver. This makes it more difficult for banks to detect fraudulent activity.
Password sharing also has privacy issues. Caregivers can see past transactions, and they can see how much money the older adult has in other accounts.
Research has also shown that password reuse is common . A shared banking password may inadvertently also give caregivers unintended access to the older adult's email, online shopping or social media accounts .
The Canada Revenue Agency allows people to login to their CRA My Accounts by authorizing through their bank , so password sharing can also give caregivers the ability to redirect an older adult's tax refunds and benefits.
Our research also shows that bank password sharing makes caregivers feel uncomfortable and illegitimate as though they are impersonating the older adult just to help with banking tasks.
Proxy accounts could help
Banks could support older adults and their caregivers by implementing proxy accounts. These are lightweight delegation accounts that allow someone to officially do banking on behalf of someone else.
We conducted an interview study with older adults and caregivers and all 21 participants who tried out our prototype of a proxy bank account were positive, with many of them asking how they can sign up for one.
Proxy accounts give caregivers their own login credentials, which means banks and older adults can track what transactions their proxies make. This setup allows older adults to keep their banking passwords private.
Proxy accounts place limits on what proxies can see. For example, a caregiver might only have access to a chequing account, but not savings or retirement accounts. Proxy accounts also offer limits on what a proxy can do, such as only paying bills to existing payees or only sending e-transfers up to $200.
Proxy accounts enable older adults to get the help they need while protecting their privacy and their financial assets. They provide caregivers with legitimacy and accountability so they don't have to impersonate an older adult just to help pay some bills.
The technology to support proxy accounts is straightforward, but these accounts are not currently offered by banks or credit unions in Canada. If Canada's banks or credit unions were to provide such accounts, it would make a difference in supporting older adult clients while gaining a competitive advantage.
Celine Latulipe receives funding from NSERC.
Zach Havens does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
