magnifying glass examining the word fraud
(Credit: Sean Gladwell/Getty Images)

Results of a study using an experiment designed to mimic real-world imposter scams suggests that many older adults, including those without cognitive impairment, are vulnerable to fraud and scams, placing them at considerable risk for adverse health and financial outcomes.

Researchers led by Lei Yu, PhD, of the Rush Alzheimer’s Disease Center at Rush University Medical Center in Chicago conducted what they believe is the first study to objectively examine financial fraud and scams in older adults using a behavioral experiment. The results were published Friday in JAMA Open Network.

The experiment, conducted October to December 2021, was done in collaboration with the Financial Industry Regulatory Authority Investor Education Foundation. In the experiment, representatives from a fictitious government agency contacted older adults about a possible retirement account breach related to their Social Security and Medicare benefits. Participants were older adults in the Rush Memory and Aging Project, an ongoing study of chronic conditions of aging.

The 2021 IC3 Elder Fraud Report, released in 2022 by the FBI’s Internet Crime Complaint Center reported losses of $69 million by older adults to government impersonation fraud. In 2022, losses from such fraud exceeded $136.5 million.

In 2021, government imposter scams were the type of fraud most frequently reported to the Senate Special Committee on Aging’s fraud hotline, accounting for 12% of calls, according to a 2022 committee report. Between 2015 and 2020, of the total 8,402 complaints reported to the Senate Aging Committee fraud hotline, 40.3% were government impersonation scams.

According to the JAMA Open Network study authors, it is estimated that each year, one in 18 cognitively intact older adults in the United States falls victim to financial fraud and scams. The latest sentinel data from the Federal Trade Commission found that older adults filed close to half a million fraud reports in 2022, with a collective loss of more than $1.5 billion. The AARP places that cost at closer to $8 billion annually in stranger-perpetrated fraud costs to older adults.

Study participants were exposed to deceptive materials through mailers, emails and phone calls. The researchers focused on phone calls, reporting that 31.5% of the 644 participants answered phone calls or called in to an 800 number listed on the mailer or in an email. Notably, 71% of participants who called in to the 800 number participated without skepticism, compared with 50% who answered a call, suggesting that older adults who called in were more vulnerable to scams.

A total of 68.5% of participants did not engage through any means of communication, and 15.1% engaged but were skeptical — a group that had the highest cognition and financial literacy. 

Of the 16.4% of participants who engaged without skepticism, almost three-fourths provided potentially compromising personal information — 12% willingly shared personal information, and close to 5% provided the last four digits of their Social Security numbers.

The authors noted that further examinations of functional, behavioral and psychosocial characteristics of the participants revealed that cognition, financial literacy and scam awareness were important factors associated with vulnerability.

They concluded that their findings provided “powerful evidence” that many more older adults than currently identified, including many without cognitive impairment, actively engage with potentially fraudulent pitches and are at risk of “victimization and the deleterious health and financial consequences that result.”

The study was funded by grants from the National Institute on Aging and FINRA Investor Education Foundation. 

The federal Consumer Financial Protection Bureau publishes several resources for long-term care providers and older adults and their families, among them “Preventing elder financial abuse: Guide for nursing homes and assisted living communities” and “Reporting elder financial abuse: Help for family and friends of people living in nursing homes and assisted living communities.” Free PDFs can be downloaded, or paper copies ordered, online. The publications are available in English and Spanish.