Insights from psychology reveal who is most susceptible and when.

With 1 in 6 Americans aged 65 or older, a figure expected to grow, older adults often hold significant assets and decision-making power, making them prime targets for financial exploitation. In 2021, the FBI reported over 90,000 older victims of fraud, resulting in $1.7 billion in losses—a 74% increase from 2020. The true figures might be higher due to underreporting from embarrassment or lack of awareness.

Financial exploitation is a prevalent form of elder abuse, often perpetrated by those within the victims' social circles, such as family members or caregivers, but also by strangers. Older victims tend to lose more money than younger ones, which can have severe consequences on their independence, health, and well-being due to their limited ability to recover financially.

Despite the growing concern, research on elder financial exploitation is limited. Psychologists studying social cognition and decision-making at the University of Florida are exploring factors that influence susceptibility to deception among older adults.

Defining Vulnerability

Financial exploitation involves tactics like coercion, manipulation, undue influence, and deception. Most research focuses on distinguishing truth from lies in interpersonal communication, though deception increasingly occurs online. 

The University of Florida's lab uses various methods to study susceptibility, including surveys, brain imaging, behavior analysis, eye movement tracking, and heart rate monitoring. They also collect health-related biomarkers, like gene variants linked to Alzheimer's disease, to identify individuals at higher risk.

Their research shows that an older adult’s ability to detect deception is influenced not only by their personal traits but also by the nature of the targeting.

Individual Risk Factors

Better cognitive, social, and emotional capacities, along with brain health, are linked to lower susceptibility to deception. Cognitive functions, like information processing speed and memory, decline with age, affecting decision-making. For instance, decreased analytical thinking in people around 70 or older is linked to reduced ability to detect false news stories. Similarly, low memory function correlates with higher susceptibility to phishing emails, especially in older adults carrying a gene variant associated with Alzheimer's.

Social and emotional factors are also significant. Negative moods can enhance lie detection, while positive moods in very old age can impair the ability to detect fake news. Loneliness and lack of support exacerbate vulnerability, with the COVID-19 pandemic highlighting increased susceptibility among digitally less literate older adults.

Interoceptive awareness, the ability to read one’s bodily signals, is crucial for detecting deception. Research indicates that financially exploited older adults have a smaller insula—a brain region integrating bodily signals with environmental cues—compared to those who avoided exploitation.

Types of Effective Fraud

Different deceptive strategies affect people differently. Older adults are more susceptible to email phishing that leverages reciprocation, whereas younger adults are more prone to fall for scarcity tactics. Older adults also struggle more with detecting untrustworthy individuals who appear trustworthy, showing greater difficulty in overcoming initial impressions even after learning about deceitful behavior.

Reducing Vulnerability

Identifying those at higher risk for financial exploitation is essential for prevention. Tailored interventions, potentially using machine learning to detect dangerous deceptive messages, could provide real-time warnings. Additionally, interventions must resonate with specific communities, as Black and Hispanic consumers face higher victimization rates.

A holistic approach is needed to reduce older adults’ vulnerability to scams. Training in financial, health, and digital literacy is crucial, as are programs addressing loneliness. These lessons are essential for people of all ages, as financial exploitation often comes from close individuals, not just strangers.