A new study from the Stanford Center on Longevity found that anger and excitement (known as “high arousal” emotions) can lead to risky decision making, especially for older folks.
Many elderly are victims of financial fraud. The Federal Trade Commission estimated that in 2011, 7.3 percent of adults aged 65 to 74 were victims of financial fraud. For folks age 75 and older, the Commission reported about 6.5 percent were victims of financial fraud.
The Stanford Center study found older adults are “particularly susceptible to the effects of high arousal emotions on decision making.” The study found older folks were willing to pay for an advertised item, even if they had problems believing the advertisement was “too good to be true.”
Especially older folks were victims of financial fraud when they had emotions of anger or excitement. But younger folks were less likely to be victims.
You know the con artists (fraudulent callers) try to create excitement by pressuring for a quick decision. Sometimes they try to indicate others have taken action and so should you.
One of the basic ways to avoid the frauds is by not saying “yes” too quickly. Why not wait a few days to check out if the offer is real or not? It’s OK to ask your trusted advisors (attorney, CPA, banker) what they think of the offer. It is best to resist the pressure to make a snap decision.
Also, you know you should not give personal information to strangers who call on the phone. If they are on your doorstep, ask to see their credentials and/or speak to their supervisors. It is reasonable and appropriate to do some background research on the charity, vendor etc. to be sure they are real.
You have heard of (or maybe been called yourself) of the telephone call that claims one of your relatives is in trouble and needs money right away. A call I received a couple of years ago claimed one of my nephews was in Canada and needed some money right away. I called him at work in Carson City. He was not in Canada and was not in any trouble.
The main idea is to avoid letting emotions lead you into making bad decisions. Colin Powell has some rules, including, “Remain calm. Be kind. Check the small things. Be careful what you choose.”
You can avoid being a victim of financial fraud by not making decisions when you are angry, excited, worried or confused.
Did you hear? “I do my best not to live up to my name,” by Adrian Careless, a bank manager.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.