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Snowbird
alert
U.S. dollar bank deposits are not insured in Canada
If you’re a snowbird, or a frequent traveller to the United States, pay special
attention to your deposit protection, say specialists in this field.
November is Financial Literacy Month and it’s also the time of year when
retirees start to travel south. To smooth this travel, many snowbirds open a U.S.
dollar account here in Canada – but if you do that, be aware those deposits
would not be protected by CDIC if that bank failed.
“Many people don’t realize that foreign currency accounts, including those
in U.S. dollars, are not covered by Canada Deposit Insurance Corporation,”
says Brad Evenson, CDIC’s communications director. “Understanding deposit
insurance is an important aspect of financial literacy, particularly for people
like retirees who wouldn’t have time to make up losses in the event their bank
failed.”
He notes that banks can go under in Canada: 43 have failed since CDIC’s
creation in 1967. “Even during those failures, depositors did not lose a single
insured dollar.”
“You’ve worked hard for your money,”Mr. Evenson points out. “The best way to
protect it is to get informed.”Take a look at the workings of deposit insurance in
three videos available on YouTube (CDIC channel).
Wintering down south?
Get your benefit cheques faster
Canadians who forward their mail down
south may sometimes worry if their
federal benefit cheques will arrive on
time or get lost. Now that the federal
government is phasing out cheques in
favour of direct deposit, much of the
worry can be eliminated.
Already, more than 80 percent of pay-
ments made to Canadians are by direct
deposit because of its convenience,
reliability, security and cost-efficiency.
With fewer cheques to print or mail,
the federal government stands to save
$17.4 million a year. The cost to produce
a cheque is approximately 82 cents,
while direct deposit only costs 13 cents.
According to PublicWorks and
Government Services Canada, most
of Canada’s seniors already receive
payments such as the Canada Pension
Plan, Old Age Security and Guaranteed
Income Supplement through direct
deposits to their bank accounts. To date,
90 percent of CPP payments to recipi-
ents and 92 percent of OAS payments
made to beneficiaries are received
electronically. The remaining few who
don’t already get their money this way
are being encouraged to sign up soon
rather than wait for the 2016 deadline.
By registering for direct deposit at
your financial institution, online
at
at
1-800-O-Canada, money that is owed to
you for things such as CPP or OAS, plus
veterans’ benefits or tax refunds, can
be deposited faster and more reliably
directly into your bank account.
If you aren’t signing up online, you can
still visit your local bank branch and
make the necessary arrangements in
person. It’s a simple matter of filling
out a form. Once completed, payments
from that point on will be deposited
directly into one or several of your bank
accounts, according to your preference.
Seniors can prevent financial abuse and fraud
Anyone can be a victim of financial crime, but when it comes to financial abuse and
fraud, seniors are one of the most targeted groups.
Protect yourself, or your loved ones, by taking a few simple steps, as follows:
Financial abuse
can include taking money without permission, failing to repay
money, misusing credit or debit cards or a Power of Attorney, or even pressuring a
senior to sign legal documents that do not benefit them. It can be committed by a
close friend, relative or caregiver who has access to their finances.
Protect yourself against financial abuse by keeping all passwords private—avoid writ-
ing them down or sharing them since cardholders are responsible for all authorized
use of valid cards. Consult a lawyer before signing over any financial authority, and be
cautious before opening a joint bank account. Use direct deposit for regular income,
such as pension payments, and schedule preauthorized payments for monthly bills to
reduce the time spent on banking.
Fraud
is the most common type of crime committed against seniors. It can happen in
person, as well as through email, phone calls and websites. Elderly people are often
targeted during the day, when they are at home to answer the phone or door.
To reduce the risk of falling victim to fraud, never give out banking information in re-
sponse to a phone call or email—banks do not contact clients directly to ask for these
details. Be careful when disposing of old banking statements and bills; fraudsters can
rummage through garbage, so be sure to shred them. And before hiring someone to
work on your home, ask for proof of identity and references, and check them.
More tips on preventing financial crime, plus the steps to take if you become a victim,
are available at
itpaystoknow.gc.ca
.