The Causes and Consequences of Financial Fraud Among Older Americans

Financial fraud of older adults is a major threat to well-being. This problem is expected to grow as the baby boomer generation retires and more retirees mange their own retirement accounts. This paper presents findings from a unique dataset which allowed us to examine the causes and consequence of financial fraud. We found that decreasing cognitive capacity is associated with higher scame susceptibility scores and was predictive of fraud victimization. In addition, we found that overconfidence in one’s financial abilities and knowledge was associated with fraud victimization. Finally, victims of fraud were found to increase their willingness to take financial risks compared to propensity-matched non-victims.