#252 Are the Elderly Really Vulnerable to Being Scammed?

Financial Literacy

Is the idea of vulnerable older people being more susceptible to being scammed just part of the ageist stereotype?

A Five Minute Read

In last weeks Newsletter I reported on a study that showed just such susceptibility. It said that as their financial literacy went down, people over 80 were more susceptible to being scammed. Susceptibility was measured using a self-reported scale.( See Newsletter #253 Financial and Medical Literacy. )

I wanted to check whether this was real. Was it instead a part of the ageist stereotype of decline?

Measuring Scams

Are older people subject to more attempted scams? Are they more prone to fall for a scam than a younger person? If they are scammed, do they lose more money? Unfortunately, the answers to all these questions are buried in some difficult data. The biggest problem is non-reporting. All ages are embarrassed to admit that they have been scammed. Especially if they have lost money. They may only tell family and friends. Attempted scams are so common now that they have become not worth reporting. The Federal Trade Commission (FTC) estimates that only 2% of actual scams are reported

The FTC does report data and try to make estimates. They operate the Consumer Sentinel system. During calendar year 2024, Sentinel took in more than 6.5 million complaints from consumers. Those reports included over 2.6m reports about fraud. Consumers reported losing about $12.8 billion. Unfortunately, just over half of those reports did not include age information. Of the 45% that did , just over a third were from people who were over 60. Reported losses from them totalled nearly $2.4 billion, up from about $1.9 billion in 2023.

Scams and Older People

In 2024, older adults reported to Sentinel significantly more attempted scams than younger people. However, three quarters of those attempts did not result in any financial loss. They were better at avoiding being scammed than the younger victims. The young reported fewer attempted scams but more successful ones. The problem is elsewhere. Successful scams against older people mean much bigger financial losses.

The nature of the scams is different by age groups. Younger groups lose 65% more money to online shopping scams for instance. The older group lost the most in investment scams, including crypto currency. Victims report being lured to fake crypto currency platforms via social media. The amount lost was twice as high as the second scam on their list. This was money lost to business impersonation, particularly bank impersonation. This was followed by impersonations of Government entities and “Romance Scams”. The top 5 was completed with “Tech Support Scams”.

Age Does Matter.

In 2024 there was a significant rise in the amount lost by the over 60’s. This was driven by a large rise in losses over $100,000. These accounted for only 5% of the reported successful scams but 68% of the proceeds. Between the ages of 20 and 59 the average amount of money lost to scams is between $400 and $500. This rises to $691 between 60 and 69 and $1000 between 70 and 79. Unfortunately the largest average losses of $1650 are sustained by the over 80s.

It appears that old people are more vulnerable than the young. They are on social media and that is where the majority of scams start. They seem to be good at spotting potential frauds. However, when they are caught it costs them more money. All this could be put down to financial literacy decline. However researchers point to other impacts of getting older. Loneliness is more common and means there are less people to support decisions. Loneliness also is the main driver of “Romance Scams”.

The Consequences of Scams

The total amounts lost are very large when we allow for nonreporting. People, especially older people, are too embarrassed to admit they have been scammed. There are clues to the scale. The FTC tracks scams reported to Sentinel by friends and family. The losses described are much higher. For the over 80-year-old the average is $6000. That is four times higher than the self-reported number.

The FTC does prosecute companies known to be running scams. During those prosecutions they can gain access to the names of victims. They matched those lists with the complaints filed against the same company in Sentinel. They estimate that only 2% are ever reported. That rises to 6.9% for losses above $1000. Correcting for non-report the FTC estimates the total losses to scamming in 2024 were $195.9Bn. $81.5BN was lost by older adults.

These are only the financial costs. There are many studies looking at the other and perhaps more important costs. Older people have less chance to recover their savings. Scams lead to more people moving into care. It undermines their sense of autonomy and control.

Is the idea of a vulnerable older person being more susceptible to being scammed just part of the ageist stereotype? Probably not.

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