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Safeguarding Retirement in the Age of Scams

DeLiema, Marguerite (2024) — SSRN Electronic Journal

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DOI: 10.2139/ssrn.5068931 (opens in a new tab)

Type:   Journal Article
Country:   United States
Tags:   AI-Enabled Fraud, Financial Fraud, Financial Institutions, Older Adults, Prevention, Repeat Victimization, Retirement Security, Romance Scams
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Synopsis

            
This publication presents a research-based overview of how scams threaten retirement security for older adults and what retirement-plan ecosystems can do to reduce exposure and harm. It situates fraud as a large-scale, evolving threat driven by technology, anonymity, and sophisticated manipulation, noting that in 2023 nearly 400,000 fraud complaints by adults aged 60 and older resulted in about $1.9 billion in losses. The authors emphasize that older victims face not only financial costs but also psychological and emotional harm, including shame and isolation, which can hinder recovery and trust. The report outlines a framework of prevention and response designed for retirement plan sponsors, financial institutions, and participants. It distinguishes primary prevention (reducing exposure and engagement with scams) from secondary prevention (in-the-moment responses to protect funds) and tertiary prevention (reducing long-term harm). Key strategies include increasing scam awareness through actionable education, training financial professionals to recognize red flags, activating account-security features (multifactor authentication, passkeys, and monitoring), and promoting advance financial care planning and trusted contacts. The document also discusses secondary measures such as in-the-moment warnings and clear reporting pathways, and tertiary measures that help recover funds and prevent future victimization. Among the findings cited are higher reported losses among older victims and the role of factors such as wealth, social isolation, and cognitive changes in risk. While the publication highlights evidence that awareness and proactive safeguards can reduce susceptibility, it also notes challenges like optimism bias and the need for ongoing, up-to-date messaging to keep pace with evolving scams and new technologies. The piece calls for ongoing collaboration among plan sponsors, advisors, and protection agencies to strengthen protections and support aging individuals.

          

        
                  

            
Identified Gaps

            
Fraud is substantially underreported, especially for low-dollar losses, making prevalence and cost estimates uncertain. Evidence on whether older age itself raises scam susceptibility is mixed because many studies rely on self-reported victimization, and older adults may be less likely to disclose it. Prevention campaigns also struggle to keep pace with evolving scams, while consumers may forget protection advice over time.

          

        
                  

            
Methods

            
This is a policy-oriented narrative synthesis drawing on FTC and FBI complaint statistics, prior surveys, meta-analyses, qualitative studies, and intervention research. It summarizes scam types, persuasion tactics, age-associated risk factors, consequences, and a three-level prevention framework for retirement plan providers, participants, and related organizations. No original sample, data collection, or analytic procedure is reported in the supplied text.

          

        
                  

            
Limitations

            
The publication relies primarily on cited prior research and administrative complaint data rather than reporting a new empirical study. Fraud complaint data are affected by substantial underreporting and varying reporting rates by loss amount. Evidence about age-related susceptibility is mixed and self-report studies may underestimate older adults’ victimization because of lower disclosure. Several cited mental-health studies were not focused specifically on older adults.

          

        
                  

            
Future Work

            
Evaluate adaptive, regularly refreshed scam-prevention messaging and account-warning interventions that can keep pace with evolving, AI-enabled schemes. Assess whether coordinated partnerships among retirement providers, financial institutions, adult protective services, and law enforcement reduce repeat victimization and improve recovery outcomes for older adults.

          

              

    
    

        
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