Older people are targeted by con artists simply because they often have more money – not necessarily because they are frail and helpless.
Think of "elder fraud," and the usual images that come to mind are a door-to-door traveling salesman preying on a forgetful codger with thick bifocals. Or acres of Florida swampland sold to a lonely old widow with a walker.
Not so, said Doug Shadel, a leading expert on fraud schemes and the elderly. Think of a financially successful 60-something who is promised a 50 percent return on his investment in a new Hollywood film. He’s even been promised that he’ll get a chance to meet the star.
Shadel is part of the new interdisciplinary Research Center on the Prevention of Financial Fraud , launched recently by Stanford University’s Center on Longevity and the FINRA Investor Education Foundation. The new research center will be a resource for law enforcement, the government and research groups studying how Americans lose billions of dollars each year to fraud.
The center will hold its inaugural conference, "The State and Future of Financial Fraud," Nov. 3-4 in Washington, D.C.
The reason for the Center on Longevity’s involvement is that the elderly are clear targets of fraud and their victimization is widespread. "But the factors that go into making people vulnerable are not well understood," said psychology Professor Laura Carstensen, the center’s founding director.
"Even people who did everything right are finding themselves in situations where those savings are being stolen," she said. An overwhelming number of defrauded people are older than 50, she said.
Stanford News Service
Professor Laura Carstensen is founding director of the Research Center on the Prevention of Financial Fraud.
It’s a concern for everyone in society – not just the elderly. As older people live longer and government support is cut back, American seniors are more reliant than ever on savings. When those piggybanks are looted, the overburdened next generation will be picking up the tab.
So it behooves us all to know what puts people at risk.
The early findings go against the conventional wisdom. Older people are targeted simply because they often have more money – not necessarily because they are frail and helpless. Far from being less financially savvy, they are often more so, having trusted relationships with financial advisers and institutions.
Shadel recalled a victim who fell for an oil-and-gas scam. "He lost $40,000, but what was interesting about the guy is that he was a stockbroker. You wouldn’t think that of someone who day-in and day-out gives people advice about money."
"We assumed that the people who were defrauded were less financially literate – wouldn’t you think so?" asked Shadel. "It’s not the case at all." Victims typically included "doctors and lawyers and presidents of companies."
The beginnings of the Research Center on the Prevention of Financial Fraud go back to 2009, when an expert group of education practitioners, policymakers and researchers gathered at the Center on Longevity to discuss the problem of fraud in the context of a rapidly aging population.
"By the end of the day, I thought everyone is a victim in waiting," said Carstensen. "Those of us who haven’t been victims are lucky."
The group identified three lines of action: consolidating information, which is then spread among an array of academic fields; communicating research to policymakers; and providing funding for more research.
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