According to a study conducted by UCLA psychologist Shelley Taylor, one reason that older adults may be more easily prone to being deceived is that there appears to be less activity in the part of their brains that processes subtle danger and risk. She wanted to find out how well older people recognize visual clues indicating that someone may be scamming them.
Taylor brought in 119 seniors over the age of 55 and 24 people in their twenties. The two groups looked at 30 photographs that showed one of three faces: a neutral looking face, an untrustworthy one, or a trustworthy one. Taylor found that while the seniors and younger adults rated the neutral and trustworthy faces about the same, the elder adults had a more difficult time identifying the untrustworthy cues, rating them as more trustworthy than did their younger counterparts.
A follow-up study she then conducted using brain imaging showed the seniors exhibiting less activity in the risk processing area of the brain. She also said determined that people’s propensity to focus more on the positive as they grow older might too be causing them to miss deception cues (such as a smile that doesn’t include the eyes or someone who leans backward and/or looks away.)
Unfortunately, many elderly persons who are also investors continue to lose their life savings because investment fraudsters are targeting them. According to an AARP survey, last year that looked at the behavior of 723 fraud victims with an average age of 69 and compared them to the conduct of members of the general public, those that were successfully targeted were more likely to read junk mail, take calls from telemarketers and believe in promises that sound “too good to be true.” Women appeared most vulnerable to petty fraud while senior men who had investing experience were the ones that suffered the largest losses.
Other reasons why elderly citizens are a target of senior financial fraud, says the FBI, is that a lot of them:
• Have Great credit.
• Own a “nest egg.”
• Are from a polite, more trusting generation.
• Are less likely to report fraud.
• May have a harder time giving police detailed information about what happened because of memory problems.
That said, elder investors are not the only ones susceptible to financial fraud. “Studies have shown that highly educated and experienced investors are not immune to being cheated,” said Shepherd Smith Edwards and Kantas Founder and Elder Financial Fraud Attorney William Shepherd. “People who realize they do not understand an investment often shy away. Meanwhile, sophisticated investors may buy because they understand the sales pitch. Only later do they learn that what they were told was false or misleading.”
Contact our senior financial fraud law firm to schedule your free case evaluation.
Why It’s Easier To Scam The Elderly, NPR, December 6, 2012
Fraud Target: Senior Citizens, Common Fraud Schemes, FBI
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JPMorgan Chase Must Pay Oil Heiress’s Trust $18M For Derivatives Investments, Account Mismanagement, and Unsuitable Investment Advice, Stockbroker Fraud Blog, October 12, 2012
Insurance Agent Convicted in Annuity Case Involving 83-Year-Old Dementia Patient, Stockbroker Fraud Blog, March 21, 2012
UBS ‘Rogue Trader’ Convicted of Fraud that Caused $2.3B Loss, Institutional Investor Securities Blog, November 22, 2012