Photo Credit: Don Hankins / CC
Published May 12, 2021
The Tennessee Conservative Staff –
In honor of National Senior Fraud Awareness Day on May 15, the Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division issued a warning to Tennesseans about the correlation between social isolation and the risk of financial exploitation.
Isolation is said to have a direct impact on exploitation, especially among older residents.
Elizabeth Bowling, the Assistant Commissioner for TDCI, said, “While financial abuse can happen at any time, perpetrators often strike during times in a senior’s life when they may be more vulnerable, such as during a health crisis or after the death of a loved one.”
During the Covid-19 pandemic, senior citizens across the state were vulnerable to being exploited while having to isolate, especially if they lived alone.
“Scammers often gather personal details from obituaries and social media posts and use this information to target their victims. Some also may attempt to exploit trust within seniors’ social and support groups to become more involved in their lives,” Bowling said.
According to The Government Accountability Office, seniors across the nation lose around $2.9 billion each year due to being scammed and exploited. Identity theft is also a common occurrence when it comes to fraudulent activity. The Federal Trade Commission estimates that Tennessee saw a $40.6 million loss during 2020.
However, TDCI said that most senior fraud is underreported “due to embarrassment and lack of information about where to report fraud.”
According to the TDCI, “Social isolation and diminishing cognitive capacity can combine to affect the judgment and decision-making capacity of senior investors – rendering them more vulnerable to financial abuse. Over the past year, with many seniors in isolation during the heart of the pandemic, seniors were even more vulnerable to financial abuse.”
The FINRA Foundation conducted research that found people who are isolated are more prone to falling for a scam if they don’t have anyone they can talk to about it. This makes it more likely for an exploited person to be someone who is widowed or divorced.
“When seniors and others are socially isolated, they increasingly turn to the internet for social interaction and more frequently depend on the internet as a social outlet and are increasingly relying on online services for shopping, banking and the initiation of electronic payments that may have otherwise been paid in person,” Bowling said. “Research shows that people who are contacted by scammers through social media or through a pop-up message on a website are more likely to engage with the scammer and lose more money than those who were targeted by phone or email.”
Loneliness plays a factor in falling victim to financial exploitation or scams, according to the TDCI, as it can lead vulnerable people to seek out connections online.
“As a result, online romance scams have become increasingly pervasive because the scammers can easily use the anonymity of the internet to mask their deceptive intention,” the TDCI said.
Anyone who wants to report possible fraud or exploitation can do so with the Tennessee Securities Division. Individuals can also request speakers to lead presentations about senior financial exploitation.