Why Investment Scams Cost Older Adults the Most, and How to Recognize Them
A friendly stranger reaches out on Facebook. The conversation is pleasant. Over a few weeks, they share photos, ask about your week, and eventually mention an investment opportunity that is paying steady, impressive returns. They are not pushy. They just want to share what is working for them.
By the time the warning signs become clear, the money is often gone.
Investment scams cost older adults more money than any other type of fraud in 2024, according to the Federal Trade Commission. The reason is simple: many people in or near retirement have spent a lifetime building assets, and scammers know it. The math of a single successful investment scam can dwarf years of phone fraud.
May is National Elder Law Month. This year’s theme is Protecting Rights, Fighting Scams. At Everbright Legacy Law, we believe the best defense is a clear-eyed view of how these scams operate.
How investment scams work
Most start on social media or a dating app and develop slowly. The scammer builds a relationship, often using flattery or shared interests. Then comes the offer:
- “Guaranteed” returns far above market rates
- An exclusive, limited-time opportunity
- Testimonials from “real people” who have made money
- A polished website, app, or trading platform that shows your account growing
- Markets that are hard to verify, like cryptocurrency or overseas real estate
Once you invest a small amount and see it “grow,” the scammer encourages you to put in more. The trap closes when you try to withdraw. Suddenly there are fees, taxes, or restrictions, and your money disappears.
Red flags before you invest
- A stranger contacts you first and pushes you toward an opportunity.
- The pitch promises high returns with little or no risk.
- You are told to act fast or lose the chance.
- The platform is unfamiliar and not registered with the Securities and Exchange Commission.
- You are asked to pay fees up front to access “your” money.
- The person discourages you from talking with your family or financial advisor.
Questions to ask before any investment decision
AARP recommends asking each of the following before you invest:
- Is this product registered with the SEC or the Minnesota Department of Commerce?
- What are the total fees?
- How does the investment firm make money?
- What factors could cause the value to drop?
If the person on the other end cannot answer these clearly, that is your answer.
How an elder law attorney fits in
Investment fraud often surfaces in elder law work, not investment law. We see it when families review accounts after a hospitalization. We see it when a power of attorney is activated and the new agent finds unfamiliar transactions. We see it when a Medicaid application reveals assets that vanished without explanation.
A complete plan does more than protect documents. It builds a habit of consulting a trusted team before major financial moves. Everbright Legacy Law is the only Minnesota law firm integrating licensed social workers with legal services. Our attorneys and social workers help families set up the structures that make scams harder to pull off, including durable powers of attorney, trustee oversight, and regular check-ins with the people closest to the money.
If you have been targeted
- Minnesota Department of Commerce (investment fraud complaints): mn.gov/commerce
- Federal Trade Commission: ReportFraud.ftc.gov
- FBI Internet Crime Complaint Center: IC3.gov
- National Elder Fraud Hotline: 833-FRAUD-11
Already worried that someone in your family has been pulled into a scheme? Call us at (952) 925-4147 or email hello@everbrightlegacy.com. The sooner the conversation starts, the more options remain.
