Our resesarch (shows) just how much a person's style in relating to money or numbers plays into his or her vulnerability in becoming a victim of fraud.
CLAREMONT, CA (PRWEB) December 14, 2015
New research by a team at Scripps College in Claremont, Calif., indicates for the first time just how significant “numeracy” or comfort with numbers is in helping protect the elderly from scammers.
“There has been a lot of press in recent years about how you can help protect your aging parents from commonly perpetrated scams, and our research adds an important element to the discussion about just how much a person’s style or tendency in relating to financial matters, money, or numbers plays into his or her vulnerability in becoming a victim of fraud,” Stacey Wood, associate professor of psychology at Scripps College, said.
According to Wood, older adults who are “low numerate” are, in general, less likely to engage with numeric information and less able to extract meaningful and precise information resulting in errors. Further, low numerate individuals are more susceptible to certain biases in their decision making including increased susceptibility to verbal versus numeric risk information, framing, and mood effects. “These individuals aren’t necessarily bad decision makers, but they tend to skip over numbers and tables when reviewing information, or they may rely on a partner who is more detail and math oriented,” Wood said.
The numeracy research study was led by Dr. Wood and Dr. Pi-Ju (Marian) Liu from Scripps College, and Dr. Yaniv Hanoch, Associate Professor of Psychology at Plymouth University, UK. A team of Scripps undergraduates completed the nearly 200 interviews required for the study.
For this study, people between the ages of 60 and 95, living within the community in California, were asked a series of questions to establish to what extent they may have been exploited financially within the previous 12 months. Study participants were also asked a series of demographic questions relating to their education, marital status, physical and mental health and their ability to live independently. The research was funded by a grant from the National Institute of Justice.
“We were surprised that almost two-thirds of the participants endorsed at least one risk factor for fraud,” Wood explained. “While this may seem relatively mild, we know from other work with scam victims that scammers are increasingly organized and will serially target a victim once any opening has been given. Sadly, it is a very lucrative endeavor for the scammers who face low risk of prosecution.”
Wood emphasized that with millions of older adults experiencing financial exploitation, it is vital to gain a better understanding of what protects them from it. The data reveals that numeracy plays a key role, with high numeracy found to be a significant predictor of decreased risk after controlling for other demographic variables, she explained, adding that, to the best of her knowledge, this is the first paper to illustrate the protective role numeracy plays in tackling financial exploitation.
Less numerate participants reported risk of experiencing financial exploitation significantly more frequently, regardless of other risk factors, including dependency, physical and mental health, as well as overall cognition. The researchers also noted that by identifying potential victims at an earlier stage it may be possible to identify those individuals most likely to benefit from intervention.
What can be done about it? Consumers in general and seniors in particular need to be proactive in protecting themselves and their assets, especially after a close call. Steps such as talking with their financial institutions regarding fraud alerts and protections can be helpful. Also, family members may consider moving away from landlines which signal to scammers an older person is in the home.
More information: Stacey A. Wood et al. Importance of Numeracy as a Risk Factor for Elder Financial Exploitation in a Community Sample, The Journals of Gerontology Series B: Psychological Sciences and Social Sciences (2015). http://bit.ly/1lBMORe