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Emotions Increase Susceptibility to Fraud in Older Adults

Financial fraudsters often attempt to evoke strong emotions in their victims to convince them to hand over money. New research suggests that seniors may be particularly vulnerable to the effects of heightened emotions on decision making. Researchers at the Stanford Center on Longevity—working in collaboration with researchers from the FINRA Investor Education Foundation and the AARP Fraud Watch Network—found that inducing emotions such as excitement and anger in older adults increased their intention to buy falsely advertised items.

The Experiment

person holding money in hand
An important implication
of these research findings
is that older people may
indeed be more susceptible
to acting on fraudulent
pitches, which employ
tactics designed to push
a variety of emotional

Lead researcher Ian Gotlib, Ph.D., and his colleagues used a version of what is known as the Monetary Incentive Delay (MID) to induce various emotional states in two sets of people: older participants (ages 65-85) and younger participants (ages 30 to 40). Essentially, participants played a computer game in which they watch a screen and have to enter fast-paced responses using the space bar. Some won back money they had lost earlier in the game (creating excitement). Others lost money they had won earlier (inducing anger). And a control group played for low stakes, winning or losing only small amounts of money (keeping emotions in check, or neutral).

Participants then viewed one of eight different advertisements that had been designated by the Federal Trade Commission as misleading (for example, an ad for special diet pills that removed fat from foods). For each one, participants were asked to rate the believability of the content and the likelihood that they would purchase the product if cost were not a consideration.

Results in Older and Younger Participants Differ

In older adults, both excitement and anger increased the intention to purchase the items compared to participants in the control group. In younger adults, however, there were no significant differences in intention to purchase, suggesting that heightened emotion did not have an effect on younger adults’ susceptibility.

The research turned up another difference between older and younger participants. In the younger group, greater advertisement believability was associated with greater intention to purchase. In other words, higher ratings of credibility were associated with a greater intent to buy the advertised item. But for older adults, believability and purchase intention were not significantly related. In short, older adults could think the ad was not very credible—and still be interested in making a purchase. The findings suggest that older adults’ intention to purchase was not based on perceived credibility, but rather on the emotional states they were experiencing.

The research also found that the type of heightened emotional state—positive (excited) or negative (angry)—didn’t matter when it came to making purchase decisions. Both emotional states have an influence on older adults’ susceptibility to fraud.

An important implication of these research findings is that older people may indeed be more susceptible to acting on fraudulent pitches, which employ tactics designed to push a variety of emotional buttons.

Doug Shadel, Ph.D. of AARP Washington and one of the authors of this new research, noted, "Whether the con artist tries to get you caught up in the excitement of potential riches or angry at the thought of past and future losses, the research shows their central tactic is the same and just as effective." Shadel regularly talks about a fraudster’s ability to put potential victims "under the ether," thereby allowing their fraud to work. "Cons are skilled at getting their victims in to a heightened emotional state where you suspend rational thinking and willingly hand over your hard earned money to a crook," said Shadel.

The take away? Don’t make investment purchases in the heat of the moment. Gerri Walsh, President of the FINRA Investor Education Foundation notes, "Money is emotional, and managing your emotions around financial decisions is critical to avoiding fraud."