FINRA Study Tests Senior Vulnerability to Social Security Scams

In an experiment designed to mimic a real-world imposter scam, 16.4% of older adults engaged without skepticism, but their psychological and behavioral measures were comparable to those in other engagement levels, according to a recent study by the Financial Industry Regulatory Authority and the Journal of the American Medical Association Network.

As financial fraud targeting older adults is on the rise, the study investigated how vulnerable older adults are to government impersonation scams. In the cross-sectional study, conducted from October through December 2021, the firm surveyed 664 older adults among communities in the greater Chicago metropolitan area. Data analysis was performed from February through August 2023.

A fictitious government agency reached out to the older adults about a potential compromise of personal information relevant to their Social Security and Medicare benefits. Participants were exposed to deceptive materials through direct mail, email and phone calls by a live agent.

Based on the phone call data, a total of 441 participants (68.5%) did not engage, not answering the phone or calling in. Meanwhile 97 participants (15.1%) engaged but appeared skeptical. They answered or called in but questioned the legitimacy of the outreach and did not give away personal information.

106 (16.4%) converted, meaning they answered or called in without skepticism. They also confirmed they did not change their personal information or provided the last four digits of their Social Security number.

The study found that older adults who engaged but with skepticism had the highest cognition and financial literacy, but no differences were observed in psychological and other behavioral measures based on the levels of engagement.

“The findings of this cross-sectional study provide powerful evidence that many older adults than currently recognized, including many without cognitive impairment, actively engage with potentially fraudulent pitches and are at risk of victimization and the deleterious health and financial consequences that result,” the study proposed in its conclusion.

Participants were older adults participating in the Rush Memory and Aging Project, an ongoing cohort study of chronic conditions of aging. Among the participants, 501 (77.8%) were female, while 143 (22%) were male, with a mean age of 85.6 (7.5) years.