Financial decision-making abilities and financial exploitation in older African Americans: Preliminary validity evidence for the Lichtenberg Financial Decision Rating Scale (LFDRS)

Abstract

This study examines preliminary evidence for the Lichtenberg Financial Decision Rating Scale (LFDRS), a new person-centered approach to assessing capacity to make financial decisions, and its relationship to self-reported cases of financial exploitation in 69 older African Americans. More than one third of individuals reporting financial exploitation also had questionable decisional abilities. Overall, decisional ability score and current decision total were significantly associated with cognitive screening test and financial ability scores, demonstrating good criterion validity. Financially exploited individuals, and non-exploited individuals, showed mean group differences on the Mini Mental State Exam, Financial Situational Awareness, Psychological Vulnerability, Current Decisional Ability, and Susceptibility to undue influence subscales, and Total Lichtenberg Financial Decision Rating Scale Score. Study findings suggest that impaired decisional abilities may render older adults more vulnerable to financial exploitation, and that the LFDRS is a valid tool for measuring both decisional abilities and financial exploitation.

New Approaches to Preventing Financial Exploitation: A Focus on the Banks

“…In our first study with the screening scale, we found evidence for criterion-related validity in 69 older adults (Lichtenberg et al, 2015a), where the screening scale score was significantly related to neurocognitive tests and money management scales as well as to financial exploitation. Our second study was both an examination of implementation and construct validity.…”

“…Lichtenberg, Ficker, and Rahman-Filipiak (2015a) and Lichtenberg, Stoltman, Ficker, Iris, M., and Mast (2015b) created two scales that are based on a person-centered approach to financial decision making: a comprehensive decision-making rating scale and a screening scale . Our method is based on the belief that (1) people are more than the sum of their cognitive abilities, (2) their values matter, (3) the context of their life matters, and (4) they make decisions based on what is important to them and not according to how good they are at remembering things or solving new problems.…”

“…As described below, we conducted an in-depth process to create a new evaluation tool, the Lichtenberg Financial Decision-Making Rating Scale ( LFDRS ; Lichtenberg et al, 2015a, 2015b), which focuses specifically on the financial decision in question.…”

The Lichtenberg Financial Decision Screening Scale (LFDSS): A new tool for assessing financial decision making and preventing financial exploitation

“…Following Marson et al’s (2009) methods, interrater reliability was established across 10 independent raters by having multiple raters view the videotapes and score the LFDRS. In our second paper (Anonymous, Ficker, & Rahman-Filipiak, 2015b), we presented preliminary criterion validity results for the LFDRS. Due to its length, however, the LFDRS is impractical for use by criminal justice, financial, or social service professionals.…”

“…The result was the 10-item Anonymous Financial Decision Making Screening Scale (LFDSS). The first empirical paper to examine LFDRS and LFDSS criterion-related validity was recently published (Anonymous et al, 2015b), and we will now discuss the results of that study in terms of the screening scale.…”