Feature Articles - Aging
Increase in fraud with older adults
Mary Gosche, Human Development Specialist, University of Missouri Extension
In the span of two years, older adults have seen a 12 percent increase in money lost to financial exploitation and fraud, according to a 2012 article from Stone Hearth News. It is estimated that more than $2.9 billion was lost to those adults, age 60 and up, in home repair scams and other financial transactions.
In that same article, a UCLA study explains a region in the brain that affects the ability to decipher between someone who is honest and someone who is trying to deceive us. This region is called the anterior insula and it aids in distinguishing honesty and trustworthiness. This part of the brain is less active in older adults.
Another study tested the reaction of younger adults and older adults to a stranger. The younger adults reacted strongly while the older adults did not. The older adults saw untrustworthy faces more honestly and more approachable than the younger adults did.
“Older adults are more vulnerable. It looks like their skills for making good financial decisions may be deteriorating as early as their early-to-mid-50’s,” said Shelley E. Taylor, a psychology professor at UCLA.
This part of the brain helps the body create “gut feelings.” The brain mapping study leads the researchers to think that the older adult has a diminished gut feeling that something is wrong.
How can I detect a fraudulent salesperson?
Usually the smile is insincere and fake. The eye contact is not good. The salesperson may be pushy and in a hurry.
Don’t talk to salespeople pushing investments. Just say no. Do not go to free lunch seminars where they are a team of people making investment pitches. Hang up on those people who are trying to sell you something over the phone.
Scam artists are targeting the 70-year-old and older market because this age group is required to take distributions from their 401(k) accounts. Be careful with those distributions and inheritances.
How can I protect myself?
- Know the person you are dealing with. Never buy from someone you do not know. Check with family, friends and the Better Business Bureau.
- Don’t cave in to high-pressure sales tactics. Take time to check it out. If that person is only going to be in the neighborhood or county briefly, say, “no, thank you.”
- Pay with a credit card if you can. Most cards offer some protection if you do not receive the service or item.
- If it sounds too good to be true, it probably is!
- If you receive a phone call or email asking for your bank account information, notify your bank and report it to the Missouri attorney general at 1-800-392-8222.
- Report lost or stolen checks or credit cards right away.
- Don’t carry all your personal information with you. Leave your Social Security card, birth certificate and passport in a safe place.
One more note: Avoid buying large purchases from TV ads because those diamond earrings could be made of glass.
Stone Hearth News (2012). Why older adults become fraud victims more often. http://www.stonehearthnewsletters.com/why-older-adults-become-fraud-victims-more-often/elder-care/
MissouriFamilies.org (2009). Protecting yourself against identity theft. http://missourifamilies.org/features/consumerarticles/idtheft.htm
Last update: Tuesday, February 19, 2013