Why Older Americans are Susceptible to Financial Fraud
Innovations in technology, medicine and public health have resulted in longer life spans and a burgeoning older adult population with some interesting characteristics:
- Older adult generation today is wealthier than previous generations1
- Actual changes in the brain as we age make us less able to recognize an untrustworthy person2
- Our financial capacity and decision making declines with age although our confidence does not3
These factors combine to create a perfect, growing target market for scammers and financial abuse, and as a result, far too many older Americans are being financially exploited by strangers via telephone, mail and online. Some are even targeted by family members or by people they trust.
Top 10 Scams Reported to U.S. Senate Aging Committee Fraud Hotline from Jan. 1, 2015 to Dec. 31, 2015
Many of these abuses are not reported for fear of retaliation, embarrassment, not knowing what to do, or not realizing that they are victims of fraud.
In response to this emerging trend and its potential to become an epidemic, the U.S. Senate Special Committee on Aging responded with hearings in 2015 and by launching a toll-free Fraud Hotline:
1-855-303-9470
This hotline serves two purposes: (1) to maintain a detailed record of common fraud schemes targeting seniors to pass on to the committee, Congress and law enforcement and; (2) to offer real help to those targeted by scammers by connecting them with law enforcement investigators as well as consumer protection groups, legal aid clinics, congressional caseworkers and local non-profits that provide assistance to seniors.
The Committee’s Report can be accessed here, which is quite extensive and not necessary to read in its entirety. What I found relevant are the additional resources for reporting scams to state and federal agencies in Appendix 2.
“If you see something, say something”……
Given the tremendous amount of available information for us to get lost in, we hope that this post will be helpful to cut through the noise if and when needed.
With an aging population, the risk of financial fraud is real and should not be overlooked. Taking proper steps to protect both yourself or your loved ones from financial fraud and elder abuse is good planning.
Please contact your Wealth Advisor for additional information or to discuss any potential risks impacting you or your family.
1 Nielsen Boomers Report, 2012
2 Neural and behavioral biases of age difference in perceptions of trust, UCLA/National Academy of Sciences, December 3, 2012
3 How Does Aging Effect Financial Decision Making, Center for Retirement Research at Boston College, January 2015
4 Old Age and the Decline in Financial Literacy, Social Science Research Network, August 24, 2011
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