A Growing Concern

From the Greatest Generation to more recent retirees in the Baby Boomer population, people over the age of 60 account for 30% of investment fraud victims.  To make matters worse, this is a GROWING concern.  The 65-and-older population grew 18% between 2000 and 2011 to 41.4 million, and the aging population is expected to nearly double by 2029. 

The average loss for senior financial fraud victims is between $12,500 and $25,000.  But there’s no need for YOU to become a part of that statistic.  Prepare yourself with information and learn how fraudsters operate. 

Why Are Seniors Targeted?

Several factors add up to equal an appealing target.  There are some common traits among seniors that are exploited by fraudsters. 

• Trust: Seniors grew up in a different generation. Older generations tend to be more trusting.  Also, communities were smaller then, and people knew their neighbors.  Some seniors come from towns where folks didn’t lock their doors.
• Manners: Again, this is a generational issue. Etiquette is changing.  While younger people are fine with telling someone to leave them alone, a senior citizen may feel it’s rude to hang up when they receive an unsolicited call. 
• Isolation: Many seniors, especially widows, are socially isolated and possibly depressed. A fraudster who offers companionship has a better chance at manipulating seniors. 
• Interest: If a senior made bad financial decisions in the past and is now worried about the future, he or she could be looking for good deals. The promise of high returns with low risk is too tempting to pass up.

Cognitive Impairment

There’s one more critical concern facing some senior investors: cognitive impairment. There is a neurobiological basis for some seniors’ vulnerability to financial exploitation.  According to an article published in the Journal of the American Society on Aging in the summer of 2012, “of the 25 million people in the United States in 2008, ages 71 and older, 35 percent had some form of cognitive impairment or dementia.”  While it’s easy enough to see how dementia could lead to poor decision making with money, even people with mild cognitive impairment are at risk.  Research by Daniel Marson, J.D., Ph.D., Professor of Neurology at the University of Alabama at Birmingham, found people with mild cognitive impairment make FOUR TIMES the financial errors as those without the condition. 

Financial exploitation of seniors is about more than money.  It’s a health concern.  That’s why the Elder Investment Fraud and Financial Exploitation program, or EIFFE, was created.  Seniors, their families, and even their medical care providers are encouraged to visit www.investorprotection.org to learn more. 

Getting Help

If you or someone you know may be a victim of senior financial exploitation, the Indiana Council Against Senior Exploitation, is a great resource to use in order to get the assistance you need. Indiana MoneyWise and the Indiana Secretary of State’s office are founding members of IN-CASE. IN-CASE is a statewide collaboration between dozens of organizations and individuals who are dedicated to the goal of preventing and ending all forms of senior exploitation and abuse. IN-CASE members include government agencies, law enforcement, not-for-profits, medical providers, and legal providers.

If you suspect investment fraud, you can file a complaint with the Indiana Securities Division by visiting the Securities Portal or by calling (317) 232-6681.

Helpful Resources

File a Complaint
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Scam Basics