Financial Fraud
From 2010 to 2020, the percentage of persons 60 years or older has increased by 33% and is expected to continue to grow. The Silver Tsunami is here.
he FBI Internet Crime Complaint Center recorded 105,301 cases of fraud for people over the age of 60 in 2020, and in 2021 there were 128,216 fraud cases against persons age 65 or older, reported from the National Incident-Based Reporting System. A report from the Better Business Bureau finds that older adults lose more than $36 billion to financial revenue each year to financial fraud.
The actual number of fraud cases is unknown as many victims do not report their victimization. Although these facts provide some evidence, there is still a lack of research on fraud victimization of older adults.
Financial exploitation of older adults can generally be subjected into two different categories: financial abuse and financial fraud.
Financial abuse usually occurs when individuals know the victim and are in a position of higher trust, while strangers will likely commit financial fraud. Although some studies collect evidence from both, most research to date focuses on financial abuse. The next few paragraphs will focus on financial fraud.
As aging occurs, one’s brain and cognitive functioning changes make older adults more subject to scam and fraud. Older adults tend to be more trusting compared to younger adults as they are less able to recognize deceitful individuals. A 2016 Health and Retirement Study found that 34.8% of individuals the age 50 or older have been targeted or victims of a fraud investment or scammed in the past five years.
Though estimates of financial fraud victimization of older individuals differ by populations, the definition of fraud use, and the time frame considered, different from study to study, between 2.7% and 6.6% of older adults have experienced fraud in the last 12 months. Research has also shown that older victims are more likely to lose larger amounts of money to financial fraud, and that it is less likely to be handled through the criminal Justice system.
Issues of mental and physical health like depression, post-traumatic stress disorder, poor overall health, and lower quality of life make older victims more vulnerable to fraud victimization.
In 2017, about 1.33% of persons age 60 or older experienced at least one type of fraud incident. There were no statistically significant differences between persons age 60 and older or persons 59 and younger. Regardless of the victim’s age, about 65% of fraud victims experienced consumer products and services fraud.
Common examples of this fraud type are weight-loss scams, automotive repair scams, and technology support scams. Data from the 2017 SFS shows that
79.7% of fraud victims of age 60 or older were non-Hispanic white persons which is higher than the 62.0% of fraud victims who were non-Hispanic white persons. There were no statistical significant differences by victim sex, household income, or location of residents of financial fraud victims age 60 or older.
Victims may be scared to report a crime for reasons including fear, getting the perpetrator in trouble, believing there could be no help or that the crime is too personal. About 1 in 5 victims ages 60 or older reported the incident to police, and 84% of victims report the incident to another person or group. Fraud victims age 60 or older lost nearly $1.2 billion in 2017 and lost an average of $1,270. About 31% of victims age 60 or older experienced moderate emotional distress, 29% experienced mild distress, and 27% experienced severe distress.
Much of the research and data on fraud is limited due to small sample sizes, non representative samples, and a variation in defining fraud. To date, lots of data is relied on from the FBI who consistently collects data and reports on trends over time. Data from the FBI as well as data from the FBI Internet Crime Complaint Center show that financial fraud of older adults is an on growing issue.
Based on data from the research above, statistics from law enforcement do not capture the entirety of the situation. SFS aims to collect data from fraud reported and not reported to law enforcement and complements data from the FBI by including victims who do not report. Additional research on victims who do not report their incident will allow for a greater comprehensive picture to be produced. Additional research will allow for more opportunities to understand the gaps in knowledge of financial fraud in older adults.