Consumer Scams and the Elderly: Preserving Independence Through Shifting Default Rules

Authors: Nathalie Martin, University of New Mexico School of Law

Publication: The Elder Law Journal

Year: 2009

Focus Area: Prevention, Legislation

Relevance: Reducing the extent to which vulnerable consumers are exposed to (and culpable for the results of) predatory solicitation may vastly reduce the incidence of telemarketing and mail fraud.

Summary: This article identifies the common solicitation threats to older consumers and discusses different solutions to protect both elderly adults’ assets and their independence.  The article recommends a legal change that would reverse existing “do-not-call” and “do-not-send” rules, making them the default for all persons over 65 (with the option to “opt in” to receive solicitations at will).  Thus, “people over 65 would receive mail and telephone solicitations only if they so choose.” (p. 27)

Current regulation schemes fail to protect the elderly.  Changing the default rules would:

  • Provide legal deterrents to predatory solicitation
  • Shift the cost of predatory solicitation to solicitors
  • Balance the current asymmetry of sophistication between the elderly and predatory callers
  • Make all debts arising from unsolicited contacts unenforceable, protecting the financial security of elderly fraud victims
  • Overcome the difficult, confusing nature of “do-not-send” enrollment procedures
  • Protect independence, as the elderly maintain the choice to receive solicitations

It is important to note that being on a “do-not-call” list does not restrict either charities or pollsters.  This legislation revision does not reduce vulnerability to charity fraud, along with other scams such as monetary prize scams and false bank calls.  It does protect consumers from the general telemarketing industry which generates $275 billion annually and an estimated 104 million phone calls daily.

Author Abstract: Modern technology has made it easier than ever for scammers, legitimate businesses with dubious intentions, and even charities to take advantage of telemarketing.  For reasons including reduced mental faculties and loneliness, the elderly are increasingly at risk for losing money, credit, and ultimately independence to those who would exploit them.  In this Article, Professor Martin explores the benefits of existing regulations, bankruptcy, and reverse mortgages as solutions to these problems.  Professor Martin also recommends a new default rule for elderly consumers: no solicitations unless the consumer opts in.

Full Article