Only the tip of the iceberg: Fraud against older people - evidence review

1. Context
2. The study
3. Key findings and recommendations
4. Points to consider

Context

Age UK commissioned the review in response to receiving hundreds of queries each year from people worried about being ‘scammed’ (i.e. defrauded). Scams represent a major threat to older people in particular, in relation to their financial security and their general health and wellbeing.

The study

This report considers how older people in particular are affected by fraud (not including financial abuse committed by people known to the person). It is based on published material and supplementary information from organisations and academic experts in the UK only. The review’s aim was to explore the evidence base and identify gaps in information and research to inform work which tackles it. It examines: 1. The prevalence of fraud 2. Types of fraud 3. Who is targeted and how 4. Impact on victims 5. The legal and statutory framework

Key findings and recommendations

Key findings reflect the five aims of the review identified above: 1. An estimated 165,488 fraud offences against individuals were recorded in England and Wales in 2013/14, but overall the evidence base on the prevalence of fraud against consumers in general is confusing and patchy.

• Victimisation is likely to be highly under-reported.
• One survey found that 53% of adults aged 65 and over in Great Britain believed fraudsters have targeted them. In the same research, one in 12 reported having responded to a scam.

2. Fraud occurs on the doorstep and through mass marketing techniques which use mail, phone calls, texts, emails and adverts. Examples include bogus tradespeople, account takeover, advanced fee, holiday club, investment, inheritance, plastic card and identify fraud.

• It quickly adopts new technologies and online fraud in particular produces a diversity of scamming techniques.
• It can appear professional and friendly (including through ‘befriending’), threatening and intimidating and it can impersonate a legitimate providers or the police.
• Older people are at particular risk of doorstep, account takeover, investment and pension fraud. They may be increasingly vulnerable to online scams and loss of pension savings following recent pension reforms.

3. Anyone can become a victim, including people with a good financial knowledge.

• Older people are more likely to be targeted and targeted repeatedly (‘chronic victims’). This may be because they are assumed to be wealthy and because particular personal circumstances such as social isolation, cognitive impairment, bereavement and financial pressure may make them more vulnerable.
• Fraudsters often use widely available directories and databases to target potential victims, ‘affinity’ groups (groups which have a common bond, such as club members) and advertising.
• Fraudsters appear to exploit human factors such as motivations, trust, social influence, scarcity and urgency and self-confidence.

4. The financial impacts of fraud can be significant, with some victims losing tens of thousands of pounds. Estimated total losses of £9 billion per year are likely to be an underestimate.

• Older victims lose nearly twice as much money as younger victims, and a third of older people who responded to scams are estimated to have lost at least £1,000. Older people are less likely to be able to replace the money lost than those still of working age.
• Personal relationships and physical and psychological health can also be impacted (the latter including for example, depression, anxiety and reduced confidence), with long-term effects for some. Health declines faster among older victims than non-victims of an equivalent age, and can result in need for support from social services. Under-reporting of fraud can stem from a victim’s denial, sensitivity to blame from others (the very word ‘scam’ can imply this), and previous experiences of poor communication after reporting fraud.

5. The legal regulation of fraud is primarily covered by The Fraud Act 2006 and the Consumer Protection from Unfair Trading Regulations 2008.

• Their most important provisions include protection against ‘fraud by false representation’ and ‘misleading actions or omissions’. Examples of unfair practices include “persistent unwanted solicitation by telephone or e-mail” (Age UK, p40).
• There are no significant gaps in the legislation but greater priority and resource might be needed to investigate and address fraud.
• Fraud can be reported through various channels: Action Fraud UK, police and trading standards via Citizens Advice. Age UK calls on the Government to set up a National Scams Task Force to renew focus on the issue and coordinate existing and new action.

Points to consider

Based on the reference list, this appears to be a well-sourced review. It draws on a range of evidence including official Government statistics, albeit each with limitations, particularly given the under-reporting of fraud. The results of the survey describing that 53% of older people had been targeted by fraudsters are based on small numbers and no indication is given about the sample representativeness.

Full report

Only the tip of the iceberg - full report