Senior Investor Alert: 5 Easy Ways to Spot Scams Targeting Your Nest Egg

If you’re a senior investor, you’ve likely been planning and saving for years to build your portfolio. You have rightfully earned everything you have accrued over the years and you deserve to realize the fruits of that labor in your golden years.
Unfortunately, your nest egg marks you as a target for investment fraud. Scammers like to prey on what they consider “easy targets” – those without the means to defend or protect themselves against investment fraud. The Securities and Exchange Commission (SEC) has regularly cited senior investor scams as a chronic fraud issue. Most recently, the SEC has pointed to Ponzi schemes as a major vehicle for perpetrating investment fraud against seniors.

Ponzi Schemes Targeting Seniors

You’ve probably heard the term “Ponzi scheme”; it’s an ubiquitous phrase in (and out of) the investment community. But do you know how to spot one? Ponzi schemes may be dressed up with fancy tricks and smoke-and-mirrors, but at their heart, they are all based off the same formula.
But your age doesn’t have to make you a target. If you’re a senior investor, there are resources out there to help you recognize and prevent investment fraud targeted toward you and your savings.
In April, the SEC brought several charges against a company it alleges conspired in investment scams targeting seniors. All of the schemes involved some variation on a Ponzi scheme.

Lifepay, LLC

In April, the SEC brought a complaint against Lifepay Group, LLC, alleging the firm’s principals defrauded investors out of a total of nearly $3.8 million dollars in two separate scams. The SEC’s complaint outlines allegations that the founders of the retirement planning and real estate investment services firm promised elderly investors high returns on baseless claims.
In an even more egregious case, the SEC alleges that thousands of senior investors lost out on their retirement savings through a Ponzi scheme perpetrated by the Woodbridge Group of Companies, LLC.


The South Florida-based group duped thousands of retirees through a widespread advertising campaign promising high returns. The SEC’s complaint states that Woodbridge affiliates promised revenue returns from high-interest loans while actually just using investors’ capital for personal expenditures. New, incoming investments were then used to pay off initial investors. In total, the SEC complaint values investment losses of $1.2 billion.

Just because you’re a senior investor, that doesn’t have to make you a victim.

There are ways to protect yourself and your investments from fraud and threats to your retirement savings. If you educate yourself to the dangers out there, you can learn tips for protecting yourself against investment-loss.
Ponzi schemes may posit an investment risk, but they all follow a basic formula. They have tell-tale signs that, with the right eye, you can spot. Here are five ways to spot investment fraud ahead of time so you don’t end up falling victim to a scam.

5 Ways to Spot Investment Scams

Beware of Unlicensed or Unregistered Agents

Anybody handling your hard-earned savings better be qualified to do so. Unfortunately, a lot of investment fraud targeting seniors is done so through unlicensed advisors and brokers.
Always make sure you verify the background and credentials of anyone claiming to offer financial advice or an investment opportunity. It’s easy to check whether your financial advisor or stock broker is properly licensed and registered:

  • Visit to check their free database of registered investment professionals
Don’t Fall for Offers of High Returns and Low Risks

It’s easy to see why these types of scams still exist; it’s hard not to fall for the offers that seem to good to be true. But stay vigilant – investment opportunities promising big returns with little risk are the sirens of the investment world; they’ll lead you down the primrose path and leave you hoodwinked.
An easy out: just remember that if it sounds too good to be true, it probably is.

Never Feel Pressured to Buy

Your savings and assets are yours; it is your decision how and when you choose to invest it. A poor sales tactic – and one often used by those trying to scam you – is to corner a consumer; to rush their decision to commit.
Never let anyone rush you into an investment decision. In fact, if you feel pressured by anyone to act prematurely on an investment, this should be your sure-fire sign to run for the hills. Any investment professional with integrity will allow you the time to research and investigate any potential opportunity before committing.

There is No Such Thing as a Free Lunch

Gifts and gimmicks are often used by scammers to ply investors into committing to their scheme. Cheap tricks like free lunches are used to lure investors into bogus sales opportunities.

  • Treat ‘free meal’ investment seminars the same way you would a “free lift-ticket offer” when you go skiing.

If you’ve been on a ski vacation think about the time-shares that offer you a free lift ticket for attending a quick seminar about their resort: you only go for the lift ticket, not the time-share.
No matter how great the investment might seem – or to what lengths you are wooed, you should not agree to anything without proper due-diligence.

Know the History and Background of Your Investment Professional

When choosing an investment professional to handle your retirement savings, you need to have a strong understanding of their professional background; you need to know that you can trust them with your investment. Even if they’re properly licensed, they could have a history of issues that could spell trouble in the future.
Here are some common things you should find out before aligning yourself with an investment professional:

  • What is their work history? Have they been employed at any firms that have faced regulatory scrutiny or sanctions?
  • Have they experienced a personal bankruptcy?
  • Has there been a previous termination from another firm? Why?
  • Have they been subject to a review, either internally by an employer or externally by regulators?
  • Are there a lot of consumer/investor complaints about them?
  • Do they have a transient employment history?

Some of these questions may seem personal – and they are. You need to  have absolute certainty that your investment professional has the integrity and capacity to handle your savings.

Additional Resources

While these tips can be a great resource to help you spot scams targeting your nest egg, it’s not a comprehensive one. You can check out more tips and resources for protecting your investments on our blog.
If you have questions about investment-loss recovery due to fraud or stock broker malfeasance, contact us.

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