Older people can be deceived. Many financial scams are perpetrated by family, friends or even carers. Third party scams instead are done by outsiders. Why would an older person fall for a stranger’s story?Older people seem to be more vulnerable than the young. At the very least they seem to suffer the largest losses(See Newsletter #252). Financial literacy seems to decline with age. This “knowledge” decline would logically leave them more vulnerable(See Newsletter #253) Psychologists have gone further to look for cognitive and socio-emotional changes.

Cognitive Changes

Particularly in the “fourth Age” cognitive decline may become more pronounced. In today’s world, that can often be when an individual is in their 80’s. The early stages of dementia have been associated with a bigger likelihood of being scammed. There has even been a suggestion that being scammed may be a lead indicator of dementia.

Changes in decision making style have also been blamed. Older people often process decisions using algorithms. This is more efficient and does not require a “back to basics” review of all options and criteria. Such “algorithmic decision making” has been associated with increased risk of being deceived. An older person thinks they recognize a pattern in a phishing attempt. They do not spot the flaws in the email and can let someone into their system by “clicking on the link”. For the same reasons susceptibility to “fake news” increases.

Attention is the most basic of cognitive processes. However, lack of attention can be dangerous. With little awareness an older person will “browse the web”. They can inadvertently fall for click bait. That can lead to danger.

Indeed, avoiding fraud can involve a complex array of cognitive abilities. We need to fully understand the information. To appropriately evaluate the opportunity and detect the subtleties of deception. We then need to formulate strategies to escape the situation. Older people can do all this. Evidence suggests that if a decision is important they can marshall the resources. If their attention wanders or they do not see the decision as important….

Socio Emotional Changes.

Deception is not just a cognitive process. It also requires trust and rapport. Many scammers rely on their ability to empathize with their victims. To build up a “relationship” and induce them deeper and deeper into the scam. Socio- emotional selectivity theory has been discussed in this Newsletter before(See Newsletter #033 Always Look on the Bright Side of Life. Age brings with it an increasing awareness of mortality. This in turn changes people’s motivation. They focus on the positive side of life and avoid negativity wherever possible.

The positivity bias in older people has been well documented. Unfortunately, this carries over into their evaluation of potential “investment opportunities”. They will tend to see the upside of any deal and underestimate the risks.

There is a shift to emotionally meaningful goals. To pay greater attention to positive emotional information. They will even remember the more positive part of any interaction. They will suppress anything negative. Older people respond differently to interpersonal conflict. They tend to experience fewer negative emotions than younger adults. They are much more trusting.

A Complex Model

Scamming is a deception. It needs a victim, but it also needs a lie.

Ageing does not make someone vulnerable. Individuals can be vulnerable because of individual factors plus their environment. We can think of six personal competence factors:

• general intellectual functioning,
• cognitive functioning,
• physical functioning,
• motivation/personality traits,
• social intelligence,
• and social skills.

All of which can create vulnerability or resilience. Knowledge in the form of financial literacy, comes from an individual’s history. Isolation and loneliness increase vulnerability. So does depression and general psychological vulnerability. Sufferers have a stronger need to connect with others even if that is a scammer. Studies suggest that such individuals are three to five times more at risk. Such people have been shown to be victims of multiple scams.

As a marketing person it is sad to reflect that creating a “plausible lie” is a marketing problem. Scammers will profile prospective targets and tailor their offers accordingly. They know that pensions and savings will not necessarily last. They can offer a quick way to make money with crypto currency. They know that loneliness can create an opportunity for a “friendship offer”. The loss of a long-term partner can bring on depression and vulnerability.

A Gut Feel

There is an interesting link to a previous Newsletter on interoceptive awareness. This is the sensitivity to the internal signals travelling around the body. For many they remain completely subconscious. Others are more sensitive to the signs (See Newsletter #247 Butterflies in the stomach). A study combined this idea with the ability to detect deception. The sensitivity of young and old respondents to their own heart rate was measured. This is a standard test of interoceptive awareness. They were then given two deception detection tests. The first to assess whether a person on a video was lying. The second was to detect a phishing email amongst a collection of emails.

It turns out that we may have a gut feel about people. Some individuals have high interoceptive awareness. They were better able to detect whether someone was lying. Older people with higher scores also did better at spotting the scam email. Multiple studies suggest that we only detect deception at slightly above random chance. Perhaps we should listen to our gut more if it can improve the odds.