Older adults with limited knowledge of fast-changing financial and medical products often lack the capacity to spot fraud and scams. Furthermore, the popularity of smartphones and mobile payments in China increase the exposure of older adults to fraud. Using a national survey, this study has two major research questions: 1) What is the prevalence of fraud and what are the individual characteristics of the fraud victims, and 2) What social and physical factors are associated with being defrauded? This paper is one of the first efforts to investigate experience of fraud among older adults in China based on national representative data.
Methods. This study used a subset of the 2015 China Health and Retirement Longitudinal Study (CHARLS) with respondents aged 50+(N=16,924). Logistic Regression was used to test the relationships among fraud experience (binary), gender, age, education (had formal education or not), living area (rural/urban), marital status, disability, self-rated health(poor/good), social engagement (binary), financial assets, activities of daily living (ADL), and internet use (binary).
Results. Results showed that 9.6% of Chinese older adults have experienced fraud. The mean amount of fraud was 21.9k RMB with a standard deviation of 141k RMB. Further, findings showed that males (OR=1.10, p>.05), city residents (OR=1.22, p<.01), respondents with poor health status (OR=1.16 p<.05), and older adults with disabilities (OR=1.23, p<.01) were more likely to experience fraud. We also found older adults with a formal education were 42% (p<.001) and those who need help to manage their finances were 27% (p<.05) more likely to be defrauded. Surprisingly, we also found a significant interaction between health status and internet usage: those who self-rated fair health and above as well as used Internet were 16% (p<.05) more likely to be defrauded compared to those with poor health and did not use Internet.
Implications. Older adults who live in city areas, had higher education backgrounds, with disabilities, and had social activities had higher exposure to fraud. Further, the counter intuitive significant interaction between health status and Internet usage denoted emerging sources of financial scams in China: fraudulent healthcare products and telecom fraud. This research paves the way for policies and programs that prevents financial scams among vulnerable older populations both by enhancing financial education and literacy, and by enforcing advertising regulations in China.