Australians over 65 lose more money to scams than any other age group. The Australian Competition and Consumer Commission (ACCC) Scamwatch reported that more than 46,000 people aged 65 and over made the most reports of being scammed. They lost more money ($82 million) than any other age group.
Unfortunately, older adults have limited capacity to recover from these losses and this may just be the tip of the iceberg because not every scam is reported. Many older people are too embarrassed to admit their naivety.
The older you are, the more likely you are to fall prey to criminals trawling for victims in the digital world or via your phone.
The most common scams targeting older people are government department and Australia Post impersonation scams.
Scientists at Rush University in Chicago (USA), led by biostatistician, Associate Professor Lei Yu, tested the vulnerability of seniors to scams by presenting 644 older people, average age 85, (78 per cent female) with fake phone calls, emails or letters from a fictitious government agency.
The fake communication said that there had been unusual activities in their social security files and that their retirement income and health care benefits could have been compromised.
Recipients were older adults participating in the Rush Memory and Ageing Project, an ongoing study of ageing. Consequently, researchers had detailed information about their age, education, health, financial skills, scam awareness and cognitive ability.
Phone calls are the most common and effective method used by fraudsters targeting older adults. Based on the phone call data participants were classified into three groups:
1. Did not engage with the scammer. More than 68 per cent of participants did not answer the phone call or respond to requests to ring a number or visit a website.
2. Engaged with scepticism. Just over 15 per cent answered or called in but were sceptical about the legitimacy of the communication and did not give away any personal information.
3. Cooperated with the caller without scepticism. Approximately 16 per cent engaged in conversations with a caller impersonating a government representative.
Professor Yu said even more concerning, 12 per cent of the participants in the experiment confirmed that they had not changed their personal information and willingly shared personal information. Nearly five per cent provided the last four digits of their Social Security number.
Older adults who engaged with the caller, but were sceptical, had the highest cognition and financial literacy, while those in the cooperating group had the lowest awareness of scams.
These results show that many older adults, including those without cognitive impairment, are vulnerable to fraud and scams.
Further examinations of characteristics of the participants revealed that cognition, financial literacy, and scam awareness are important factors associated with vulnerability.
In Australia 16 per cent of seniors (over four million people) are likely to be susceptible to being scammed. This is far more than surveys have suggested.
Estimates in the US study are likely are on the low side, given that the researchers used a fictitious government agency name. Fraudsters create more compelling scams by impersonating real government agencies and organisations and use persuasive language and urgency to gain compliance with their scheme.
Older adults with higher levels of financial literacy are potentially more capable of detecting fraudulent outreaches; on the other hand, low awareness of scams renders older adults highly susceptible to fraud.
The researchers say that non-engagement is far and away the best strategy to prevent becoming a victim of fraud.
The study was published in September 2023 in JAMA Network Open. 2023;6(9):e2335319.
