We’ve all heard stories about friends, relatives or acquaintances who have fallen victim to financial scams.
An email or phone call purporting to be from Revenue Canada insists you owe back taxes that must be paid immediately, or there will be dire consequences.
Or a ‘friendly’ telemarketer claims you’ve won a trip or a major prize, and you just need to provide your banking information to claim it.
The ways in which criminals try to fraudulently get your money continues to grow, and despite warnings from police forces, consumer advocacy groups and government agencies for all of us to be on alert in order to avoid falling prey, one group in particular is increasingly being targeted – older adults.
As the number of older adults – many who have significant savings - continues to rise, it’s no surprise that efforts to scam them are also growing. A recent business news report from the United States noted that victims of financial fraud or abuse are losing more than $36 million annually (1).
The financial exploitation of older adults has been recognized as a serious problem, associated with major consequences such as increased mental and physical health problems, more hospitalization, shortened survival, and diminished quality of life. However, knowledge about the extent of the problem is mostly limited to ‘financial abuse,’ which is perpetrated within a relationship of trust, such as family or caregivers. Little is known about elder financial fraud and scams, which are perpetrated by strangers.
A recent systematic review prepared by researchers from both Canada and the United States is the first attempt to estimate the prevalence of elder financial fraud and scams in the United States (2). The review included 12 population-based studies, with a total of 41,711 individuals who lived in the community. Ten studies involved only cognitively-intact adults, and two included adults with a range of cognitive functioning.
The types of scams or fraud addressed in the review included investments, products and services, employment, prize and grant money, charities and identity theft.
What the research tells us
Overall, the review concluded that one in 18 (5.4%) of cognitively-intact, community-dwelling adults are the victims of financial fraud and scams annually in the U.S. However, the studies included showed a range of prevalence depending on how they were conducted and the age range of participants.
Studies that used closed-ended and descriptive questions found a higher prevalence rate (7.1%) than studies using a single self-report question approach (3.6%). Studies that were of higher quality also had a higher prevalence rate (7.5%).
The review notes that the findings likely underestimate the true prevalence of the problem for various reasons: particularly vulnerable populations, such as those with cognitive impairment and living in long-term care homes, were excluded from the studies; several studies had low response rates, possibly due to previous victims being reluctant to share personal information; and victims of financial fraud and scams tend to under-report the problem.
The review could not determine whether older adults experience higher rates of being victimized by fraud or scams than other age groups, but older adults have distinct age-associated characteristics that make them more vulnerable to fraud and scams.
Avoiding or resisting scams and fraudulent activities requires complex, higher-order cognitive functions that are more likely to decline in older adults. Age-related changes in cognition are associated with poor decision-making and greater susceptibility to scams, and older adults are disproportionately targeted by fraud attempts with schemes designed to exploit age-associated vulnerabilities.
The research also found that in addition to financial losses, victims can experience emotional and health consequences, such as depression and anxiety. A majority of victims report anger, stress, regret, betrayal, embarrassment, sadness, helplessness and shame.
The authors noted that given the prevalence of the problem, it’s likely that health- and social-system professionals who work with older adults will routinely encounter victims of elder financial fraud and scams, and could be key players in addressing this issue. Instruments to help professionals screen for victims of financial fraud represents an important area for future research.