Emotions Increase Susceptibility to Fraud in Older Adults: Research from Stanford, FINRA Foundation and AARP

WASHINGTON–(BUSINESS WIRE)–#fraud–Financial fraudsters often attempt to evoke strong emotions in their
victims to convince them to hand over money, and seniors may be
particularly vulnerable to the effects of heightened emotions on
decision making. With funding and research participation from the AARP
Fraud Watch Network and the FINRA Investor Education Foundation,
psychologists at Stanford University found that inducing emotions in
older adults increased their intention to buy falsely advertised items.

The research team – Ian Gotlib, Ph.D., Katharina Kircanski, Ph.D. and
Nanna Notthoff, Ph.D. – examined whether inducing excitement and anger
increases susceptibility to fraud in older adults (ages 65-85) and
younger adults (ages 30-40). The team used a laboratory task to induce
participants to exhibit excitement or anger; a control group was not
induced to exhibit any particular emotion. Participants then viewed
eight different advertisements that had been designated by the Federal
Trade Commission as misleading. For each one, participants were asked to
rate the believability of the content and the likelihood that they would
purchase it if cost were not a consideration.

In older adults, both excitement and anger increased intention to
purchase the items compared to no emotional arousal. 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. Further, whereas in younger adults greater
advertisement believability was associated with greater intention to
purchase, believability and purchase intention were not significantly
related in older adults. The findings suggest that older adults’
intention to purchase was not based on perceived credibility, but rather
on the emotional states they were experiencing. Another insight is that
the direction of the emotional state – positive or negative – didn’t
matter, an indication that both emotional states have a broad influence
on older adults’ susceptibility to fraud. An issue brief on the
research, coauthored with Doug Shadel, Ph.D. of AARP Washington and Gary
Mottola, Ph.D. of the FINRA Foundation, is available at the Stanford
Center on Longevity.

“This research is a major advance in our understanding of how fraud
works. Recognizing the mechanisms of scams helps investors to protect
themselves,” said Gerri Walsh, President of the FINRA Investor Education
Foundation. “Money is emotional, and managing your emotions around
financial decisions is critical to avoiding fraud.”

“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,”
said Dr. Shadel, Research Lead for AARP’s Fraud Watch Network. “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.”

About AARP

AARP is a nonprofit, nonpartisan organization, with a membership of
nearly 38 million that helps people turn their goals and dreams into
‘Real Possibilities’ by changing the way America defines aging. With
staffed offices in all 50 states, the District of Columbia, Puerto Rico,
and the U.S. Virgin Islands, AARP works to strengthen communities and
promote the issues that matter most to families such as healthcare
security, financial security and personal fulfillment. AARP also
advocates for individuals in the marketplace by selecting products and
services of high quality and value to carry the AARP name. As a trusted
source for news and information, AARP produces the world’s largest
circulation magazine, AARP The Magazine and AARP Bulletin. AARP does not
endorse candidates for public office or make contributions to political
campaigns or candidates. To learn more, visit www.aarp.org
or follow @aarp and our CEO @JoAnn_Jenkins on Twitter.

About the FINRA Investor Education Foundation

The FINRA Investor Education Foundation provides underserved Americans
with the knowledge, skills and tools necessary for financial success
throughout life. Established in 2003, the foundation supports innovative
research and educational projects aimed at segments of the investing
public that could benefit from additional resources. For more
information, please visit www.SaveAndInvest.org.

Contacts

FINRA Foundation
Ray
Pellecchia, 212-858-4387
or
AARP
Mark
Bagley, 202-434-2504