- Medicine - Apr 17 Deaths from viral hepatitis surpasses HIV/AIDS as a preventable cause of deaths in Australia
- Business - Apr 16 Chocolate milk ban riles schoolchildren
- Medicine - Apr 16 Firm targets 3D printing synthetic tissues, organs
- Astronomy - Apr 16 Sentinel-1 first images
- Astronomy - Apr 16 First radar vision for Copernicus
- Psychology - Apr 16 Inhibited children become anxious adults
- Environmental Sciences - Apr 16 Atkinson Center launches postdoc fellowships
- Environmental Sciences - Apr 16 Elephant expert shares calls, images from the wild
- History - Apr 16 Columbia Professors Help Illuminate the Crisis in Ukraine
- Environmental Sciences - Apr 16 Shade Grown Coffee Shrinking as a Proportion of Global Coffee Production
- Medicine - Apr 16 Making our water safer April 16, 2014 Researcher awarded $4.2M provincial research chair to find better ways of managing one of the world’s most vital resources
- History - Apr 16 Crowd- sourcing Britain’s Bronze Age: call for public to help catalogue and model prehistoric artefacts
- Medicine - Apr 16 Concordia calling
- Life Sciences - Apr 16 For Cells, Internal Stress Leads to Unique Shapes
Stanford launches center to study fraud against the elderly
Think of "elder fraud," and the usual images that come to mind are a door-to-door traveling salesman preying on a forgetful codger with thick bifocals. Or acres of Florida swampland sold to a lonely old widow with a walker.
Not so, said Doug Shadel, a leading expert on fraud schemes and the elderly. Think of a financially successful 60-something who is promised a 50 percent return on his investment in a new Hollywood film. He’s even been promised that he’ll get a chance to meet the star.
Shadel is part of the new interdisciplinary Research Center on the Prevention of Financial Fraud , launched recently by Stanford University’s Center on Longevity and the FINRA Investor Education Foundation. The new research center will be a resource for law enforcement, the government and research groups studying how Americans lose billions of dollars each year to fraud.
The center will hold its inaugural conference, "The State and Future of Financial Fraud," Nov. 3-4 in Washington, D.C.
The reason for the Center on Longevity’s involvement is that the elderly are clear targets of fraud and their victimization is widespread. "But the factors that go into making people vulnerable are not well understood," said psychology Professor Laura Carstensen, the center’s founding director.
"Even people who did everything right are finding themselves in situations where those savings are being stolen," she said. An overwhelming number of defrauded people are older than 50, she said.
Stanford News Service
Professor Laura Carstensen is founding director of the Research Center on the Prevention of Financial Fraud.
It’s a concern for everyone in society – not just the elderly. As older people live longer and government support is cut back, American seniors are more reliant than ever on savings. When those piggybanks are looted, the overburdened next generation will be picking up the tab.
So it behooves us all to know what puts people at risk.
The early findings go against the conventional wisdom. Older people are targeted simply because they often have more money – not necessarily because they are frail and helpless. Far from being less financially savvy, they are often more so, having trusted relationships with financial advisers and institutions.
Shadel recalled a victim who fell for an oil-and-gas scam. "He lost $40,000, but what was interesting about the guy is that he was a stockbroker. You wouldn’t think that of someone who day-in and day-out gives people advice about money."
"We assumed that the people who were defrauded were less financially literate – wouldn’t you think so?" asked Shadel. "It’s not the case at all." Victims typically included "doctors and lawyers and presidents of companies."
The beginnings of the Research Center on the Prevention of Financial Fraud go back to 2009, when an expert group of education practitioners, policymakers and researchers gathered at the Center on Longevity to discuss the problem of fraud in the context of a rapidly aging population.
"By the end of the day, I thought everyone is a victim in waiting," said Carstensen. "Those of us who haven’t been victims are lucky."
The group identified three lines of action: consolidating information, which is then spread among an array of academic fields; communicating research to policymakers; and providing funding for more research.
Shadel described the psychological portrait that has emerged for the likeliest marks for a scam: "They’re more open to sales approaches in general. They’re more likely to read every piece of mail they get, including junk mail," said Shadel. "They’re exposing themselves to the marketplace."
Their behavior corresponds more closely to the young people who are in a "search mode," he said – for example, young people are typically looking for mates, jobs, affiliations or simply a more exciting life. These seniors are also exploring.
"For some reason they stay in the game longer," Shadel said of these older people. They remain more open about new chances, new possibilities – but this very predisposition exposes them to predation.
It exposes them to Ponzi schemes, fake charities, online phishing scams and work-from-home schemes. It can take the form of "obvious persuasion lines," promising a 50 to 100 percent return on investment.
Shadel ed about a dozen con men who admitted their "No. 1 strategy is to get the victim under the ether – a heightened emotional state where they’re out of control."
"If they drop to the Valley of Logic, you’ve lost them," Shadel said. The con men first identify the victim’s "hot buttons": "They’ll dangle a phantom," he said, "and you get all excited about it. You’re salivating."
Families can’t intervene, Shadel said, because the victims conceal their mistakes. "Stuff is being hidden from the families as the price tag goes up," he said.
The victims then enter the "rationalization trap," he said, and tell themselves, "I’m a smart person, but there’s this stupid thing I did." At that point, the fork in the road takes them in one of two directions.
Shadel said the first is to admit, "I’m not as smart as I think." The second is disastrous: "I’m a smart person, and I’m going to prove that I was right." On that path, the victims throw good money after bad, maxing out their credit cards and hoping for the situation to reverse.
So what became of the man in investing in the Hollywood film? He happened to be a retired chemistry professor who lost $900,000 in the movie scam. According to Shadel, he was simply looking to add a little excitement to his life. As a university professor, "He was used to dealing with credible people – he wasn’t used to blatantly lying people."
Moreover, the promised movie was actually made; although it was a low-quality effort, it was enough to disguise the rip-off. Most of the professor’s money was refunded.
It’s not always easy to determine when a scam is a scam, unless you’ve seen lots of them, and Shadel said this is typical. In an of 723 known victims of fraud, only about 40 percent admitted they had lost money. Sometimes the scam was hidden behind a scrim of reality – such as the professor’s film opportunity – and sometimes the victims are embarrassed, ashamed or in denial.
"It’s unknowable what the real statistic is," said Shadel. But Carstensen and Shadel agree that there are a lot more victims than most people imagine.
Laura Carstensen, Stanford Center on Longevity: (650) 725-0347, laura.carstensen [a] stanford (p) edu
Cynthia Haven, Stanford News Service: (650) 724-6184, cynthia.haven [a] stanford (p) edu
Last job offers
- Computer Science - 16.4
Dozentin / Dozent IT-Systemtechnik
- Psychology - 16.4
- Chemistry - 15.4
Postdoc Materials Science
- Media Sciences - 15.4
- Earth Sciences - 11.4
Faculty position in Geo-Energy
- Administration - 11.4
- Mechanical Engineering - 16.4
Assistant / Associate/Full Professors Steel & Composite Structures
- - 16.4
Murdoch Singapore Pte Ltd - Lecturer in Communications
- Business - 16.4
Universitätsassistent/in post doc Non Tenure Track (Assistant Professor, non-tenure-track)
- Social Sciences - 16.4
Universitätsprofessorin / Universitätsprofessor für das Fach Sprecherziehung (BV gem. 98 UG 2002)
- Business - 16.4
Juniorprofessur (W1) - Web Data Mining
- Business - 16.4
Juniorprofessur (W1) für Betriebswirtschaftliche Steuerlehre, insbesondere Unternehmensbesteuerung
- Medicine - 14.4
Professorship of Nuclear Medicine
- Business - 14.4
Chair in Management Accounting - 31975
- Medicine - 16.4
Assistant/ Associate Professor
- Medicine - 16.4
Anita Aldrich Professorship