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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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Financial Judgment Decline: An Early Sign of Dementia
Are older adults more at risk for financial fraud than younger groups? It appears they are, according to the Federal Trade Commission's report
that reveals people aged 60 and older experience higher median fraud losses than do younger people, with people over 80 having the highest median losses of all age groups.
The question remains why elders are more at risk. One reason that older people may be more vulnerable is obvious: aging can lead to problems with cognition, memory loss, and basic life skills.
One of the first signs of vulnerability appears with a decline in financial judgment, with payments-related issues happening six years before a diagnosis of Alzheimer's or other cognitive impairment is made, at least one study shows.
For example, people who were later diagnosed with dementia had problems with missed credit card payments, showed declines in their ability to manage a checkbook or interpret bank statements, were late paying bills, or missed payments altogether. These financial capabilities were among the first sign of problems and progressively worsened over the six-year period before a diagnosis was finally made.
Certainly, other issues can lead to financial losses for seniors, including family and caregiver exploitation. Ruling that out, the finding that financial judgment and skills decline years before a diagnosis is made may help explain why seniors are more financially vulnerable.
Family and friends can help older adults by looking for early signs of declining financial capability, like unopened bills, missing money and checks, changes in credit card spending, and unexplained ATM withdrawals.
Family or caregivers who are alert to noticing financial issues when they begin or worsen may help to reduce the risk of financial fraud and—even more important—make it possible to get appropriate medical attention for their loved ones sooner.
Here are some resources:
- November 2022 Talk About Payments webinar: "Financial Exploitation of Aging Adults
"
- National Institute on Aging: Elder Abuse and Managing Money Problems in Alzheimer's
By Scarlett Heinbuch, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
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