Multilevel Risk Factors of Financial Fraud in Later Life: Evidence from China

Abstract Background and Objectives Older adults are particularly vulnerable to financial fraud. However, research on risk factors of later-life fraud has focused more on individual attributes than contextual factors and has not examined diverse types and amounts of financial loss when measuring financial fraud. We address these gaps using a comprehensive framework to explore the multilevel risk factors of fraud in later life. Research Design and Methods Using data from the 2015-2018 China Health and Retirement Longitudinal Study (n = 10,010), we employed mixed-effects models to examine three outcomes: fraud exposure, type of victimization, and the amount of financial loss. We analyzed three key elements of routine activity theory: target characteristics (e.g., prior fraud experience, socioeconomic status, cognition), guardianship (e.g., marital status, social participation), and motivated offenders (e.g., local context, available financial institutions, GDP). Results Prior fraud experience was associated with all three measures. Better episodic memory and greater social activity were associated with higher fraud exposure, while greater social activity was linked to lower financial loss. Additionally, contextual vulnerabilities (e.g., urban areas and more developed regions) were associated with increased exposure to fraud and financial loss. Discussion and Implications Our findings highlight the need for concerted action across all domains of multilevel factors to reduce fraud exposure, victimization, and financial loss among older adults. Program and policy efforts related to individual-level education, community-based guardianship (e.g., anti-scam hotlines and psychological support), and macro-level policies for monitoring and regulating financial environments should be established to combat financial fraud in later life.