Aging Today: Why are older adults especially vulnerable to financial exploitation and how common is it?

The audio from these scripts originally aired during WFSU’s Aging Today segment.

An early sign of cognitive impairment is difficulty managing money, making older people susceptible to scams or to financial abuse by family or friends. But even without cognitive impairment, the ability to judge trustworthiness can decline in later life, making older adults prey to false claims and malign intentions.  And of course, poor physical health makes many older people dependent on others, some of whom may be untrustworthy. 

While well-off older adults are often targeted, those living in poverty are, in fact, at even greater risk and are taken advantage of because they have a place to live, equity in a home, or a regular source of income, like Social Security.

Elder financial exploitation has increased over the past several decades, and one reason is the move away from defined benefit retirement plans and toward defined contribution plans.  This shift means that many older adults, rather than plan administrators, now manage their own savings and investments. Self-managed plans put retirees at greater risk because their entire nest egg could be stolen in one fell swoop.  

How common is elder financial exploitation?

It’s estimated that for every one reported case of fraudulent or unauthorized use of an older person’s resources, there are more than forty unreported cases.   Part of the underreporting may be because most cases involve family rather than strangers.  And when the perpetrator is someone they know, the loss is greater:  an average of $50,000 compared to $17,000. 

But strangers nevertheless present a danger, and financial scammers are taking advantage of fears surrounding the coronavirus.  The Federal Trade Commission offers the following advice on avoiding these scams:  Don’t respond to calls, texts, or emails about checks from the government, ignore online or telephone offers for vaccines and home test kits, hang up on robocalls, be wary of emails claiming to be from the Centers for Disease Control and Prevention or the World Health Organization, and never respond to requests to make charitable donations in cash, by gift card, or by money wire.    

WFSU-FM Aging Today

The Pepper Institute on Aging and Public Policy – with support from the Claude Pepper Center, the College of Social Sciences and Public Policy, and Osher Lifelong Learning at FSU – sponsors weekly “Aging Today” segments on 88.9, WFSU-FM NPR. Airing each Tuesday at 3:04pm, the one-minute segments highlight critical aging-related trends, issues, and policies, with an emphasis on social science research

Listen to archives of Aging Today segments at wfsu.org/agingtoday.

The featured image is courtesy of the Washington State Department of Financial Institutions

Anne Barrett is Director of the Pepper Institute on Aging and Public Policy and a Professor of Sociology. Her research areas include gender and aging, subjective aging, ageism, and cultural constructions of later life.

Lori Gonzalez is a research faculty member at The Claude Pepper Center. Dr. Gonzalez’s research includes uncovering alternatives to traditional nursing home care.

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