According to the Better Business Bureau, older adults lose more than $36 billion to financial fraud every year. Financial fraud occurs when a perpetrator obtains the voluntary provision of personal information, property, or monetary resources through duplicitous tactics.
Source: National Institute of Justice
Research has found that older adults are more likely to be targets of financial fraud and lose more money on average than younger adults.
June 2024 — Financial Fraud of Older Adults
Financial fraud occurs when a perpetrator obtains the voluntary provision of personal information, property, or monetary resources through the use of duplicitous tactics. For an incident to be classified as a personal financial fraud, victims must be intentionally deceived and lose money in the transaction.
Financial fraud of older adults (persons age 60 or older [1]) falls under the larger category of financial exploitation, which includes improper use of another person’s funds, property, or resources. Financial exploitation also includes financial abuse. The primary distinction between financial abuse and financial fraud is who commits the crime. Individuals who know the victim and are in positions of trust (for example, family members or paid caregivers) commit financial abuse of older adults; strangers mainly commit financial fraud.[2]
Research has found that older adults are more likely to be targets of fraud than younger adults.[3] Changes in the aging brain and declines in cognitive functioning (ranging from mild impairments to Alzheimer’s disease and dementia) make older adults more susceptible to scams and fraud.[4] Other risk factors include a lack of financial literacy,[5]social isolation, and loneliness.[6]
The consequences of financial fraud victimization may also be more severe for older adults than younger adults. Research has found that they lose more money, on average, than younger victims.[7] According to the Better Business Bureau, older adults lose more than $36 billion to financial fraud every year.[8] The actual number of fraud cases is unknown as many people do not report their victimization, and underreporting is especially high for older adults.[9]
Reading and Resources
- Examining Financial Fraud Against Older Adults | NIJ Journal Article
- Supplemental Fraud Survey (SFS) | BJS Data Collection
- Mass Marketing Elder Fraud Intervention | Report
Notes
[note 1] Ages of older adults in the research range from a low of 50 (AARP) to a high of 65 (Census). Here we define older adults as persons aged 60 or older. This is consistent with the Elder Abuse Prevention and Prosecution Act of 2017 and Older Americans Act of 1965 [42 USC §3002(38)].
[note 2] David Burnes et al., “Prevalence of Financial Fraud and Scams Among Older Adults in the United States: A Systematic Review and Meta-Analysis,” American Journal of Public Health 107 no. 8 (2017): 1193-1340, https://doi.org/10.2105/AJPH.2017.303821; and Marti DeLiema, “Fraud Versus Financial Abuse and the Influence of Social Relationships,” National Adult Protective Services Association, Research to Practice Series, 2018, https://www.napsa-now.org/wp-content/uploads/2012/06/Fraud-versus-financial-abuse-and-the-influence-of-social-relationships.pdf.
[note 3] Joanna Bieda and Soo Park, “Affluent Senior Citizens and Telemarketing Fraud,” Journal of Student Research 10 no. 1 (2021): 1-10, https://doi.org/10.47611/jsrhs.v10i1.1408.
[note 4] Burnes et al., “Prevalence of Financial Fraud and Scams”; and R. Nathan Spreng et al., “Aging and Financial Exploitation Risk,” in Aging and Money, 2nd ed., ed. Ronan M. Factora (Springer, 2021), 55-73, https://doi.org/10.1007/978-3-030-67565-3_5.
[note 5] Michael S. Finke, John S. Howe, and Sandra J. Huston, “Old Age and the Decline in Financial Literacy,” Management Science 63 no. 1 (2016): 213-230, https://doi.org/10.1287/mnsc.2015.2293.
[note 6] Marti DeLiema, “Fraud Versus Financial Abuse and the Influence of Social Relationships,” National Adult Protective Services Association, Research to Practice Series, 2018, https://www.napsa-now.org/wp-content/uploads/2012/06/Fraud-versus-financial-abuse-and-the-influence-of-social-relationships.pdf.
[note 7] Federal Trade Commission, Protecting Older Consumers 2021-2022: A Report of the Federal Trade Commission, Washington, DC: Federal Trade Commission, 2022, https://www.ftc.gov/system/files/ftc_gov/pdf/P144400OlderConsumersReportFY22.pdf.
[note 8] American Advisors Group (AAG), “AAG and Better Business Bureau Expand Fight Against Senior Targeted Financial Fraud,” March 21, 2019, Cision, https://www.prnewswire.com/news-releases/aag-and-better-business-bureau-expand-fight-against-senior-targeted-financial-fraud-300816638.html.
[note 9] Jingjin Shao et al., “Why Are Older Adults Victims of Fraud? Current Knowledge and Prospects Regarding Older Adults’ Vulnerability to Fraud,” Journal of Elder Abuse & Neglect 31 no. 3 (2019): 225-243, https://doi.org/10.1080/08946566.2019.1625842.
