A new study has found that senior citizens, even those without dementia, are more vulnerable to financial scams impersonating the government than previously thought.
The study, conducted by researchers from Rush University Medical Center and the nonprofit FINRA Investor Education Foundation, involved one researcher contacting 644 older adults in the Chicago area pretending to represent a phony government agency. The researcher warned them about a potential compromise of their personal information related to Social Security and Medicare benefits.
The study found that 16.4% of the participants, who had an average age of 85.6, engaged with the scam without skepticism and provided personal information, including the last four digits of their Social Security numbers.
According to Gary Mottola, FINRA’s research director and co-author of the study, this is the first study to observe the responses of older people to a scam firsthand. Previous studies relied on self-reported surveys, creating an undercount of scam victims.
The study’s findings suggest that many more older adults, including those without cognitive impairment, may be at risk of falling victim to scams than previously recognized.
The study also found that 15.4% of the participants responded to the scam but raised skepticism, while 68.5% did not engage at all.
Government impersonation scams targeting seniors are constantly changing, making it challenging for them to keep up with the latest tactics. The study also noted that many real-life scams impersonating federal, state, and local agencies are more aggressive than the ones employed in the study.
The most recent statistics from the Federal Trade Commission show that older adults filed close to half a million fraud reports in 2022, resulting in a collective loss of over $1.5 billion.
While there is a link between vulnerability to government scams and memory issues among seniors, the study found that financial literacy and ignorance of scams were bigger factors in falling prey to them.
Government impersonation scams tend to be underreported because many seniors are unaware that they are victims or hesitate to admit it. Increasing financial literacy and scam awareness among the public can be an effective means of protecting people from losing money to scammers.
