Elder Fraud and Financial Exploitation: Application of Routine Activity Theory

Abstract

Background and objectives: Elder financial exploitation, committed by individuals in positions of trust, and elder fraud, committed by predatory strangers, are two forms of financial victimization that target vulnerable older adults. This study analyzes differences between fraud and financial exploitation victims and tests routine activity theory as a contextual model for victimization. Routine activity theory predicts that criminal opportunities arise when a motivated offender and suitable target meet in the absence of capable guardians.

Research design and methods: Fifty-three financial exploitation and fraud cases were sampled from an elder abuse forensic center. Data include law enforcement and caseworker investigation reports, victim medical records, perpetrator demographic information, and forensic assessments of victim health and cognitive functioning.

Results: Fraud and financial exploitation victims performed poorly on tests of cognitive functioning and financial decision making administered by a forensic neuropsychologist following the allegations. Based on retrospective record review, there were few significant differences in physical health and cognitive functioning at the time victims' assets were taken, although their social contexts were different. Significantly more fraud victims were childless compared with financial exploitation victims. Fraud perpetrators took advantage of elders when they had no trustworthy friends or relatives to safeguard their assets.

Discussion and implications: Findings support an adapted routine activity theory as a contextual model for financial victimization. Fraud most often occurred when a vulnerable elder was solicited by a financial predator in the absence of capable guardians. Prevention efforts should focus on reducing social isolation to enhance protection.

Figure 1.

Theoretical model of elder financial victimization, adapted from routine activity theory (Cohen & Felson, 1979). Other personal vulnerability factors, such as wealth, lack of awareness of scams and persuasion, and negative life events may increase susceptibility to financial fraud but are not depicted in the model because these factors are not specific to older adults.