When someone hears that a senior citizen has been defrauded of their life savings, they too often assume the victim had a cognitive impairment, such as Dementia or Alzheimer’s. It is true these impairments can sometimes play a role in financial exploitation, but it is not always a factor.
Senior citizens are targeted because they are the population group that has the largest percentage of the nation’s money. According to the United States Department of Justice, persons age 65 and older possess 70% of all funds deposited in the country’s financial institutions, and $7 trillion in invested assets.
Seniors are also spending more time socializing via their computer, using social media such as Facebook, Pinterest, and email. This provides telemarketing scammers with easy access to the unsuspecting – and because the older adult is less technical savvy, they are more likely to be baited by malware; allowing identity theft and worse.
Telemarketing scammers are becoming more sophisticated; using elaborate social engineering and phishing methods that use information collected from social media – such as children’s names, phone numbers, birthdays, and security questions. This mature, cyber based social engineering has led to increasingly more intricate phishing techniques, to the extent that even highly skilled technical and security workers have difficulty identifying a scam.
Compared to theft by strangers, such as telemarketers, a larger percentage of seniors are financially abused by family members or caregivers. With a struggling economy over the last decade, adult children have become more dependent on financial support from their aging parents. When the adult child begins to use emotional manipulation on their parents to attain a goal financially; the senior citizen is being financially abused. Although this manipulation may not be illegal, it can be embarrassing or create anxiety for the parent. Unchecked, this behavior may also lead to criminal acts against the parent by the adult child.
One of the best documents on elder financial abuse was written by Kelly Dedel Johnson, a criminal justice consultant based in Portland , Oregon. In her article “Financial Crimes Against the Elderly”, Johnson notes victim characterization can fall along a continuum:
“At one end is the completely uninvolved victim, as in the case of identity theft or credit card fraud. Toward the middle is the victim who makes a purchase or financial arrangement that is not well informed or well-researched. At the far end is the repeat victim. Even after victimization, many people repeat high risk behaviors.
“The following are key moments that put the victim at risk in the typical fraud transaction. They have clear relevance to points of intervention:
- The victim makes the initial contact, or takes steps that lead to the initial contact, indicating receptivity to the pitch
- The victim provides information about him- or herself that helps the offender to carry out the fraud
- The victim allows the conversion of a business relationship to one of trust, and waives customary safeguards
- The victim believes the offender’s scenario or pitch
- The victim writes a check, gives a credit card number, or otherwise provides access to funds”
Not only are past victims re-targeted, as described above, but they can also fall prey to scammers offering to help them recoup their losses from previous frauds. Fraudulent operations called “recovery rooms” approach past victims and offer to investigate the original fraud and to return the lost funds–for a fee.
Naturally, once victims pay the recovery fee, they never hear from the secondary scammer again.
In a case the Stop Senior Thefts Project worked several years ago, we experienced this first hand in support of a client. The individual on the phone posed as a FBI agent, and contacted our client when she told the original scammers she had no more money left to send. We injected ourselves into discussion posing as the elderly woman’s son. The FBI agent stated he needed money to bribe officials in Jamaica in order to recover the funds our client lost. Once the individual determined who he was talking to, he voiced some choice words about us tricking him, and hung up.
In a United States Department of Justice document titled “Elder Financial Exploitation”; the USDOJ provides a list of possible explanations for exploitation of our senior citizens:
- Older adults may be more trusting than their younger counterparts and may be less able to detect facial cues that indicate untrustworthiness.
- Older adults exhibit the “positivity effect” in which older adults tend to process positive information (“He was so nice”) and ignore negative information (“She was in a bad mood” or “Why does he call five times a day?”), resulting in their overestimating the offender’s trustworthiness.
- Senior citizens may be relatively unsophisticated about financial matters, particularly when they are unfamiliar with advances in technology that have increased the complexity of financial tools. They may also have trouble with money management if the person who has typically handled the finances for the family, such as a spouse, is now unable to do so or has passed away.
- Older adults may be unable to deny requests for assets made by their adult children and grandchildren. They may also perceive their adult children as better educated than themselves and more adept at handling financial matters.
- Senior citizens may not realize the value of their assets -particularly homes that have appreciated greatly in value.
- Older adults may be lonely or isolated, placing themselves at risk of exposure to a motivated offender.
- Seniors may fear institutionalization, which could cloud their decision-making or make them more vulnerable.
- Concerns about financial stability after retirement may make some older adults more likely to take a risk for quick profit.
- Older adults may have predictable patterns that enable abusers to predict when an older person will have money on hand.
- Some older adults with dementia may have diminished capacity to recognize deceit or to make financial decisions.
- Depression may interfere with older adults’ ability to make rational decisions.
- With society’s current obsession with youth, negative attitudes towards older adults, otherwise known as ageism, may contribute to apathy toward the maltreatment of older adults and help account for the absence of a “moral panic” regarding their abuse.
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