Financial fraud is on the rise. We have heard this before. With market uncertainty and many individuals facing dire financial situations, the opportunity for fraud and abuse has seen a surge. But seniors are at particular risk, says a new study from the Retirement Research Center at Boston College, due to their enormous population, lifetime savings and typical investment strategies.
The rise in fraud is fueled by the Internet, the report notes, with the Federal Trade Commission reporting more than 1.5 million complaints in 2011, up 62% over three years. The medial loss per victim also increased, from $218 in 2002 to $537 in 2011.
But as one of fraud’s most likely targets, seniors are at a particular risk without any end in sight.
“As baby boomers age, the problem is expected to grow in the future,” the report states. “This generation is potentially a lucrative target due to three characteristics: it is enormous, with some 75 million people; increasingly well off; and facing cognitive decline. Baby boomers are accumulating inheritances from their parents, adding to substantial home equity and a lifetime of saving for retirement as the first generation to experience the transition from traditional pensions to 401(k) accounts. When money is combined with cognitive decline among aging baby boomers, it can be a recipe for fraud.”
The most common types of fraud are investment fraud, advance-fee fraud and insurance fraud, according to the BC research. Seniors should be particular cautious when it comes to “senior specialists” who claim to possess special training to help clients deal with problems that are unique to the elderly.
View the report.
Written by Elizabeth Ecker
