By Maggie Fox, NBC News
Shelley Taylor's father was in his mid-70s when two homeless men duped him out of $17,000.
The first one, a man Taylor's father described as "nice," walked him to the bank where he withdrew $6,000. "Anybody looking at him should have picked up on the cues that said 'Do not give this man $6,000'," Taylor says. "I still don't know how my father could not pick up that this was not a nice young man."
Such stories are everywhere - the couple who gave all their savings to a Canadian scammer, retirees who lost their life savings to fraudulent investment schemes, homeowners who ponied up thousands up front for roof repairs they didn't need - and never got.
But Taylor, a professor of psychology at the University of California Los Angeles, is beginning to understand why. And it's not exactly what everyone has assumed. It all has to do with the fear centers in the brain.
Gerontologists and crime experts agree the elderly are more vulnerable to fraud and many have assumed it's because of diminished brain capacity, as well as because retired people often have more assets and more time on their hands. But new research suggests that older people's vulnerability might have more to do with the way older brains process visual cues.
According to insurer MetLife's Mature Market Institute, American seniors lose $2.9 billion a year to fraud. Most victims are between 80 and 89, the Insutute found in a study conducted with the National Committee for the Prevention of Elder Abuse and the Center for Gerontology at Virginia Tech.
"So many people say the postwar generation is a very trusting generation. The implication is that this is a problem that will go away," Taylor said in a telephone interview.
Her research, published on Monday in the Proceedings of the National Academy of Sciences, suggests something else might be at work - a change in the way people process fear and suspicion.
"You know the 'uh oh' sense you get sometimes, the little sense that something is not quite right?" Taylor asks. "It's not something you can necessarily verbalize. That's what the older adults aren't getting."
Taylor's team did two studies. In one, they asked 119 people aged 55 to 84 to look at photographs of people's faces and rate them for trustworthiness, using standard cues that have been well-studied. They asked 24 young adults in their 20s to do the same.
"(Cues) that reliably occur when people are being deceitful are a backward lean, a false smile - so that is a smile that you see in the mouth but it doesn't extend up to the eyes," Taylor says. "Gaze aversion. In our stimuli, people also see males as less trustworthy than females. And for some reason facial hair is a cue to untrustworthiness - people perceive it that way, even though men with facial hair aren't any less trustworthy."
The two age groups tended to react the same to the "trustworthy" and neutral faces. But those in the older group were far less likely to agree with the young people on who looked "untrustworthy."
"They missed facial cues that are pretty easily distinguished," Taylor said. "Is something going on the brain that would explain this pattern?"
To see, Taylor's team set up a second study using functional magnetic resonance imaging or fMRI - a way to look at brain activity in real time. They studied 23 older adults aged 55 to 80 and 21 younger adults, with an average age of 33.
"We wanted to find out whether there are differences in how the brain reacts to these faces, and the answer is yes, there are," Taylor said.
In the younger adults, an area of the brain called the anterior insula was active when they were examining all the faces, but especially when looking at those with expressions or characteristics that people associate with being untrustworthy. This brain region did not activate nearly so much in the older people.
"Their brains are not saying 'be wary,' as the brains of the younger adults are," Taylor said.
"Thus, a diminished 'gut' response to cues of untrustworthiness may partially underlie older adults' vulnerability to fraud," the team concluded in the report.
Taylor said it's not clear whether this is caused by reduced brain function, or perhaps it's a natural consequence of getting older.
"We know that older adults are good emotion regulators. They make their lives emotionally more positive," she said.
"They don't stress out over small things. They turn away from negative scenes. They are less likely to go to scary negative movies. They kind of keep their emotional life in balance."
This sounds familiar to Laura Carstensen, a professor of psychology at Stanford University who specializes in how older people respond to the world. "Older people tend to prefer good over bad," she agreed.
The differences might not necessarily mean dysfunction, says Carstensen, who was not involved in Taylor's research. "It's not about chronological age so much as closeness to death," she said. All people tend to monitor how much time they have left on this planet, consciously or unconsciously. Younger people with terminal illness often respond the same way older people do, by looking at the bright side of things.
"When they do that, it tends to be good for mental health," Carstensen said.
Taylor sees it, too. "Sometimes you have an experience and you think, 'wow that really would have bothered me 10 years ago'," she said. "It's probably because the amygdala or the insula or both are not firing. They not giving that same feedback of alarm that you might have epxerienced when you were younger."
This difference may be important in efforts to help protect older people from fraud. Carstensen worries about policies that might restrict older people from making financial decisions. A better route might be to help people deflect the huge number of temptations that come their way through the mail, on the phone, or when the scam artists knock on the front door.
For her next study, Taylor's team will study the brain responses of people during a real, in-person financial scam.
In the meantime, she has some advice.
"The answer is to hang up," Taylor advises. "Throw it away. Don't open it. Don't go to the free lunch seminar. Stop it at the source."