• Jonathan Levy LCSW

Why the elderly are the perfect prey for scammers

Who would have thought that as we age we become more and more likely to be scammed? Recent studies suggest that, as we get older, our ability to be scammed in many forms of fraud increases exponentially.

Some research seems to suggest that we lose our ability to different from situations and people that are trustworthy and untrustworthy. It is almost as if the fraud detector in our brain goes dark.

Jonathan Levy LCSW on age-related financial vulnerability
Our brain loses its ability to detect sketchy financial situations as we age

In a study conducted in 2016, individuals aged 50 and older hold nearly 85% of their wealth in America. Households in American headed by people within the age of 70 and 80 also tend to have the greatest median net worth, which makes them ideal prey for scammers. The effects of these financials scams can be devastating to not only those directly involved, but their families, friends, and so on.

Children of those scammed suddenly find themselves in a position where their elderly parent does not have the financial means to maintain their household, pay for everyday expenses, and so forth. Often time the financial effects of the scam are so devastating that they require the children to take the parent in.

As the American population continues to age there is dire need to combat this type of financial fraud. The numbers are murky at best, but some studies approximate that annual loses from these financial scams range from $2.9 billion to $36 billion.

Jonathan Levy LCSW on why the elderly fall victim to financial scams
The elderly are particularly vulnerable to financial scams

While many jump to the conclusion that age-associated financial vulnerability is linked directly to neurological diseases, they would be wrong. Many of those elderly folks who were scammed are still as sharp as a tac.

Data does suggest that as the brain ages its ability to detect sketchy situations declines. Or, people may become much more optimistic in risky deals. This allows for them to inflate the upside while minimizing the downside. There is also interest in the role diminished eyesight and hearing may play in all of this.

Scientists have discovered that there is a part of the brain that is noticeably smaller in those that were not successful in being scammed. The scientists noticed a thinning of the insula, which among other things, may actually be the part of the brain that triggers senses dicey financial situations (a financial “spidey sense” of sorts).

The Brookings Institution published an award-winning paper that stated that on average, 53 is the peak age for handling money. It has sadly taken a lot of heart-ache to move us as a society to really explore this issue. We can only hope that armed with the information we now have, we can better protect our elders from financial scams.

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