The University’s Center on Longevity and the FINRA Investor Education Foundation have jointly launched the interdisciplinary Research Center on the Prevention of Financial Fraud, which will supplement work by law enforcement, the government and research groups in understanding how Americans lose money to fraud.
The center’s inaugural conference, “The State and Future of Financial Fraud,” will be held Nov. 3 and Nov. 4 in Washington, D.C.
The Center on Longevity is included in the partnership as the elderly are frequent targets for fraud; however, according to the center’s founding director Laura Carstensen, also a professor of psychology, all age groups and financial profiles are at risk.
“Even people who did everything right are finding themselves in situations where those savings are being stolen,” she told the Stanford Report.
In fact, the elderly are often caught in financial scams not because of their vulnerability, but because they are sometimes wea lthier than other segments of the population. According to fraud expert Doug Shadel, the profiles of those who get caught in these schemes are often counterintuitive.
“[A man] lost $40,000 [in an oil-and-gas scheme], but what was interesting about the guy is that he was a stockbroker,” Shadel told the Stanford News Service. “You wouldn’t think that of someone who day-in and day-out gives people advice about money.”
“We assumed that the people who were defrauded were less financially literate–wouldn’t you think so?” he continued. “It’s not the case at all.”
He mentioned doctors, lawyers and company presidents as common fraud victims.
The center has so far enumerated three purposes: consolidating information for academic use, communicating this research to policymakers and funding research.
The center is also developing psychological portraits of those who tend to fall for scams as those who are “more open,” according to Shadel.
“They’re more likely to read every piece of mail they get, including junk mail,” he said. “They’re exposing themselves to the marketplace.”
The center said it aims to address the concern that many individuals do not admit they are fraud victims because of shame, embarrassment or denial. In a study of 723 victims, only 40 percent said they had lost money.
“It’s unknowable what the real statistic is,” Shadel said.