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Recognizing and Addressing Investment Scams Targeting Seniors

The elderly are particularly vulnerable to being taken advantage of, which unfortunately makes them prime targets for investment scams. According to the Department of Justice’s most recent Elder Fraud Report, more than 4,500 individuals over the age of 60 reported being the victims of investment fraud in 2022, with total losses of slightly under $1 billion. Given the huge financial losses associated with this form of financial elder abuse, seniors and their families and loved ones need to know how to recognize and address investment scams targeting seniors, and a San Francisco financial elder abuse attorney can help. 

Recognizing Common Investment Scams Targeting Seniors 


Annuities are insurance products offered by insurance companies in which the purchaser pays a premium upfront and then after a period of time (usually 10-20 years) tthe insurance company pays out a fixed amount of income until the annuitant dies. They are not necessarily scams. However, they generally are inappropriate for seniors, as a senior will incur a penalty for getting their money back during the “surrender perior” which can be many years long and may not even end before the policyholder dies. A life insurance agent pressuring a senior of advanced age to purchase an annuity can be a form of annuity fraud

Investment Seminars 

A common tactic of scammers targeting seniors is the investment seminar. While methods vary, the scammers typically invite their targets to attend a seminar, often with lunch provided and with the promise of “educating” attendees or “getting them in on the ground floor” of a new investment opportunity. The scammers then make untrue or misleading statements, pressure attendees into buying inappropriate financial or life insurance or annuity products or charge hefty fees.  

Real Estate Investment Scams 

Real estate fraud and investment scams are becoming increasingly common as housing prices continue to climb. They can take many forms, such as offering the victim a reverse mortgage, charging excessive fees for mortgage refinances, impersonating title companies to obtain down payments, and advertising fictitious rental properties. Due to the complexities of real estate transactions, there are often multiple points of vulnerability to fraud. For example, the victim could be in the process of making a legitimate purchase only to wire funds to a fake title company just prior to closing. And given the large sums usually involved in real estate investment scams, you should consider speaking to a California financial elder abuse attorney if you think you have been the victim of one. 

Cryptocurrency Scams 

Cryptocurrency scams are one of the newer types of investment scams targeting seniors, but they are by no means any less destructive. Scammers typically prey on their victims’ ignorance of how cryptocurrency works, promising them a safe investment and huge returns. In truth, cryptocurrency generally is not a safe investment, and the returns are often far less than those promised. In the worst cases, the scammers merely make off with the victims’ investment, with the victim receiving no cryptocurrency at all. 

Promissory Notes

Promissory notes are issued by companies to investors that promise to pay the principal back to the investor plus interest. However, promissory notes generally are not issued to the general public. Scammers often issue promissory notes for investments in fictitious companies, usually with the promise of large returns and high interest rates. 

Pyramid Schemes 

Pyramid schemes are a long-standing type of investment fraud. Under the classic model, the initial promotors recruit a small set of investors, who each then recruit another set of investors, and so on. While all investors are promised returns, only the early investors ever see any, as the “returns” are paid to the earlier investors from the proceeds of the later investors. Multilevel marketing (MLM) schemes look very similar to pyramid schemes, and while most MLMs are legitimate businesses (more or less), pyramid schemes often present themselves to investors as MLMs to cloak their true nature. 

Red Flags That an Investment Opportunity Is a Scam 

Scammers do not advertise their motives to their intended victims. Therefore, seniors and their caretakers need to learn the red flags that can indicate that an investment scam is afoot. While the signs vary from scam to scam, some of the most common red flags include: 

  • High-pressure sales tactics 
  • Encouragement to “act now” to avoid losing out on the deal 
  • Promises of high returns
  • Claims of low risk or no risk 
  • Few details or convoluted explanations of the details 
  • Promises to teach a “secret method” of making money 
  • Claims of insider information 
  • Promises of a free gift or vacation 
  • Excessive phone calls, emails, or letters

If you notice any of these red flags, or if something just doesn’t seem quite right, you should consider speaking to a California financial elder abuse lawyer

Addressing Investment Scams 

Investment scams and fraud come with hefty federal and state penalties. At the federal level, securities fraud is a serious crime that is punishable by a prison sentence of up to 25 years, plus fines. In California, securities fraud is also a state crime and can carry penalties of up to five years and fines of up to $10,000,000. 

Elderly victims of investment scams also have civil recourse under California law under the following statutes, among others: 

  • Elder Abuse and Dependent Adult Civil Protection Act: Authorizes private causes of action for the victims of elder financial abuse and authorizes them to recover reasonable attorneys’ fees and costs in addition to all other damages in certain circumstances 
  • Business and Professions Code §§ 17200 and 17500: Prohibits false advertising and unfair methods of competition
  • Civil Code § 3345: Authorizes judges and juries to award increased damages (up to three times the original amount) in actions brought by or on behalf of senior citizens where the actions involve unfair or deceptive acts or practices or unfair methods of competition 

Fight Back Against Investment Scammers With Help From a San Francisco Financial Elder Abuse Lawyer 

Investment scams can have devastating financial effects on seniors that can significantly reduce their quality of life. The best way to fight back is with help from an experienced attorney. For more information, please contact a California financial elder abuse attorney at the Evans Law Firm, Inc., by using our online contact form or calling 415-441-8669 or toll-free at 1-888-50EVANS (888-503-8267).

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