- Scams and financial abuse targeting older adults are common and vastly under-reported.
- An older adult's vulnerability to financial scams can stem from social, emotional, and cognitive problems.
- Cognitive deficits and dementia can affect a person's ability to use good judgment in financial decisions.
- Limited social network size, loneliness, and social isolation are risk factors for elder financial abuse.
Financial scammers often target seniors, thinking that seniors are not of sound mind and that they have plenty of money in the bank.
Scams and financial abuse targeting older adults are vastly under-reported. Victims include both wealthy and low-income older Americans. In 2021, over 90,000 older Americans over age 65 were victims of fraud, estimated at $1.7 billion in personal losses.
Common scams targeting older adults include government imposters/impersonators, robocalls, sweepstakes and lottery scams, telephone scams like voice phishing (fraudulent phone calls to trick people into giving money or sharing personal information), computer tech support scams, "grandparent," romance, and investment scams.
An older adult's vulnerability to financial abuse and scams can stem from social, emotional/psychiatric, and cognitive problems. Clinicians and families should consider these factors when an older adult makes financial decisions with the potential for fraud.
Social Risk Factors
Dependence on others, including family members who could exploit them, makes an older person more susceptible to fraud and scams. An older person's reliance often results from impaired functional ability and physical frailty.
Generational and cultural factors, like a belief that decision-making authority rests with others (such as doctors or family members), can make an older person more prone to scams, especially when fraud involves decisions about healthcare and finances.
Limited social network size is a risk factor for elder financial abuse, due to the lack of support to help an older person identify potential scams, exploitation, and scammers. Loneliness and social isolation, frequent in older adults, are associated with increased stress, unhealthy habits, and strained relationships. Romance scams, in which criminals adopt fake online identities and gain victims' affection and trust, use the pretense of a love or close relationship to control and take advantage of the victim.
Emotional and Psychiatric Risk Factors
Depression and anxiety can impair an older person's ability to recognize and weigh the risks and benefits of financial decisions. Significant psychiatric disturbances, such as paranoia, agitation, or disinhibition, can impair an older person’s reasoning and judgment to identify and avoid scams. Fear of abandonment by loved ones can lead elders to comply with a scammer's demands.
Additional emotional and psychiatric risk factors for scams in older adults include:
- High level of neuroticism (e.g., more prone to distress than the average person)
- Problems with emotional regulation (e.g., high risk-seeking, impulsiveness, lack of patience)
- An overly trusting nature (e.g., agreeableness and being willing to cooperate; behaving honestly and expecting others to act the same)
Cognitive Risk Factors
Cognitive deficits can affect a person's ability to apply knowledge and use good judgment in all decisions, including financial ones. Older adults with dementia typically have decreased insight and awareness of their deficits, limiting their ability to recognize a scam.
Cognitive decline can affect memory, speed of processing information, problem-solving, mathematical skills, language, and other areas of thinking. Memory deficits can affect an older person's ability to remember past scams or recall what is happening to them. Attention deficits can cause older people difficulty in focusing on the essential details of a situation, rendering them more vulnerable to scams. Language deficits can affect a person's ability to understand indicators of potential fraud, communicate with others, and seek help if needed.
Medical conditions (such as traumatic brain injury, stroke, and developmental disabilities) and medications (including painkillers, tranquilizers, sleep aids, and certain drugs used for urinary incontinence) can impair an older person's mental abilities, thinking and judgment — transiently, reversibly, progressively, or permanently.
Intact social, emotional/psychiatric, and cognitive functioning enables us to recognize a potential scammer's motives. Vulnerabilities in older people can lead to poor financial judgment, enabling fraudsters to drain their bank accounts.
Reducing the Risk
When older adults and their families can work together, they are more apt to keep their money. We all know what is said about "prevention" – it is better than "cure." With scams, it is often impossible to fix the financial damage after it has happened. Seniors and caregivers can stay safe by learning about various scams and how to prevent and detect financial exploitation. The Federal Trade Commission (FTC) and the American Association of Retired Persons (AARP) regularly publish scam alerts. Older adults and their families can also work with professionals, including their doctor(s), financial planners, and elder law attorneys, to better understand their financial decisions and potential risks.
AARP Fraud Watch Network. Online at https://www.aarp.org/money/scams-fraud/about-fraud-watch-network/
American Bar Association Commission on Law and Aging – American Psychological Association. Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists, 2008. Available at https://www.apa.org/pi/aging/programs/assessment/capacity-psychologist-…
James BD et al.: Correlates of susceptibility to scams in older adults without dementia. J Elder Abuse Negl. 2014;26(2):107-22.
Marson DC: Clinical and Ethical Aspects of Financial Capacity in Dementia: A Commentary. The American Journal of Geriatric Psychiatry, Volume 21, Issue 4, 2013, Pages 382-390.
National Council on Aging: Avoiding Scams and Fraud for Older Adults - The Top 5 Financial Scams Targeting Older Adults. Online at at https://ncoa.org/article/top-5-financial-scams-targeting-older-adults