Elderly caught in the net

State crime rates released recently, highlighted a 73 per cent increase in computer-assisted or Internet fraud, but failed to assess the impact of fraud on our growing number of senior citizens.

While seniors are less vulnerable to crime in general, despite perceptions to the contrary, there is evidence that seniors are becoming more susceptible to fraud in relation to their property, manipulation of their financial accounts and in their purchase of goods and services. Fraud is now about 2.2 times more prevalent than violent offences such as assault against older Australians.

Although the risk of fraud is greater for younger rather than older Australians, in terms of the kinds of crimes experienced by older Australians alone, fraud is now the most common. Seniors are a growing target for fraud, especially Internet-based crime and identity theft, for several reasons.

First, there are more seniors to target. Those 55 and over will increase by more than 50 per cent between 2005 and 2020. By 2050, this group will have increased by more than 200 per cent - an additional 2.5 million people, while the 18- to 54-year- group will grow only 7 per cent.

Further, seniors are now a more desirable target as they hold more of the nation's wealth. Over 55s represent 21 per cent of Australia's total population, but hold 39 per cent of the nation's wealth. The average wealth of households headed by those over 65 years rose from $106,000 in 1986 to $367,600 by 2002 - a 247 per cent increase.

As well, changing financial retirement and superannuation arrangements give greater discretionary decision making to individuals, particularly seniors, on how these significant funds are invested. It has opened up a whole new avenue for financial fraud. Research suggests that increases in an individual's control and discretion over their financial assets without adequate training will exacerbate problems in this area.

Seniors have become more vulnerable to fraud, given changing social patterns that often mean less family support for aged parents, and seniors' preferences for more independent living, and their movement to "seachange" regions away from family and lifelong connections.

Last, seniors are particularly vulnerable to fraud via the new technology such as the Internet, given its importance in financial transactions and how many seniors lack skills in its use.

Internet fraud and related identity theft that use technology to manipulate seniors' assets is on the rise as more people have access to the Internet, its dominance as a financial vehicle and its accessibility to persons previously lacking interpersonal skills to commit fraud. Indeed, studies show a dramatic increase in Internet-based fraud and identity theft and its sophistication.

In January, 2004, only 176 URL-based attacks were recorded, but that figure rose to 4,367 by October 2005. These trends in fraud have potential adverse impacts not just on seniors but on the wider socioeconomic environment.

For instance, such adverse effects of fraud are more harmful to seniors, especially the more elderly who, unlike young people, have less time and ability to recoup their losses. Such losses of seniors' financial self-sufficiency may require future increased government expenditure.

More significantly, with seniors holding so much of the nation's wealth, and their roles as key economic drivers of consumption, any loss of their confidence in the integrity and security of the financial system and the Internet-based technology that underpins it, could reduce seniors' participation in the economy, affect investment choices and cause negative economic impacts.

Further, concerns about technology could reduce seniors' communication and interaction with the rest of society and their mobility at a time when it needs enhancing.

In "seachange" regions where there is a growing concentration of seniors, these adverse effects could be more acutely felt both in terms of crime levels and regional attractiveness and prosperity. Unless checked by more proactive, research-based policies, fraud against seniors will become more problematic.

This issue should be a high priority for organisations that represent seniors, the superannuation and finance sectors, business and governments.

Thinking today of tomorrow's policy problems, in relation to seniors and fraud, would be a novel change in Australian policy development.