FINRA Study Tests Senior Vulnerability to Social Security Scams

Older adults without cognitive impairment are still vulnerable to scams, FINRA and JAMA found.


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.

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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.

SEC Would Suspend Rulemaking, Enforcement During Potential Shutdown

Comment periods would remain open for the AI and safeguarding proposals, but comments would not be reviewed in real time.


The Securities and Exchange Commission will be left with “a skeletal staff” in the event of a government shutdown, unable to process new IPOs or take new enforcement actions, SEC Chairman Gary Gensler explained Wednesday. His remarks were given in response to questions at a hearing of the House Financial Services Committee.

Gensler estimated that between 90% and 93% of the SEC’s staff would be furloughed during a shutdown. This would result in the SEC operating with a staff of approximately 400 of its total 4,600 employees.

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Many SEC functions would have to halt in that scenario, including reviewing and approving documents related to IPOs. In response to a question from Representative Maxine Waters, D-California, Gensler said, “The initial public offering market would be shut down with the government,” and firms already in the process of going public would be in a “subliminal state where they cannot access the markets.”

He added that, in some cases, public companies will not be able to make new offerings because the SEC will lack the staff necessary to process the paperwork.

The possible shutdown of the government and the IPO market comes as initial offerings have begun to pick up this year, with a total of 79 sold so far in 2023, up from 71 for all of 2022, according to data from Renaissance Capital. This year’s activity remains significantly lower than the 397 that priced in 2021. Renaissance also reported 130 IPOs filed with the SEC so far this year, an 18.2% change from the same date last year.

The SEC would also be unable to take on new enforcement actions. Gensler explained that the public can still give tips to the SEC Division of Enforcement, but “there won’t be the people on the other side to investigate it.”

As for rulemaking, Gensler said the SEC “cannot finalize rules,” but comment files will stay open. He added that, in the event of a shutdown, there would not be staff to read those comments as they come in. The SEC has at least two comment periods that close in October, including a proposal on the conflicts of interest associated with the use of artificial intelligence due October 10 and a proposal on how advisers safeguard client assets due October 30.

Gensler noted that government shutdowns also damage employee morale and retention at the SEC. Most employees will be furloughed or expected to work without pay, and “it’s hard on people. They can get jobs at law firms and elsewhere.”

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