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Threat Intelligence Product: Protecting Vulnerable Adult and Senior Investors

May 2024

Threat Overview

FINRA’s Financial Intelligence Unit (FIU) and Vulnerable Adults and Seniors Team (VAST) are issuing this Threat Intelligence Product (TIP), which provides an overview of FINRA’s observations regarding the vulnerability of senior investors to investment scams, the devastating consequences for the victims and the importance of education about financial scams to prevent initial victimization and re-victimization.

An average of 10,000 Americans turn 65 each day. According to the Federal Reserve, Americans aged 55 and older control over 70% of the nation’s wealth.1 According to the 2023 FBI IC3 Elder Fraud Report, total losses reported to IC3 by elderly victims increased 11% from 2022, with victims losing an average of $33,915.2

Older adults are targeted by criminal perpetrators for several reasons (as discussed below) and the tactics criminals are using are becoming more sophisticated with the evolution of artificial intelligence (AI). Once a person has been victimized by financial fraud, the chance of revictimization of that same individual increases. Losing any amount of money to scammers can impact a person’s entire well-being, beyond just their financial health. Educating older investors, their loved ones and financial professionals about investment scams can help prevent these investors from being exploited.

While the threat against senior and vulnerable adult investors is not new, it is ever-changing and growing. FINRA views the protection of these investors as a top priority. FINRA encourages member firms to stay abreast of evolving threats and, where warranted, enhance their policies, procedures and practices accordingly.

This TIP is based on FINRA’s internal data and intelligence, as well as open-source information. Questions may be directed to [email protected].

This TIP does not create new legal or regulatory requirements or new interpretations of existing requirements, nor does it relieve firms of any existing obligations under federal securities laws, regulations and FINRA rules. Member firms may consider the information in this TIP in developing new, or modifying existing, policies and procedures that are reasonably designed to achieve compliance with relevant regulatory obligations based on the member firm’s size and business model. Moreover, some information may not be relevant due to certain firms’ models, sizes or practices.

Vulnerability of the Elderly

Older adults are disproportionally targeted by scams due to factors such as loneliness, cognitive decline, access to funds (e.g., retirement funds, pensions, government benefits) and a real or perceived lack of knowledge of technology (e.g., online banking). Often, perpetrators exploit these vulnerabilities to gain the trust of their victims and convince them to “invest” in fraudulent schemes. In addition, they use a multitude of persuasive emotional tactics with elder victims – tactics to which many are particularly susceptible. Researchers at the Stanford Center on Longevity, working in collaboration with researchers from the FINRA Investor Education Foundation (FINRA Foundation) and the AARP Fraud Watch Network, found that seniors may be particularly vulnerable to the effects of heightened emotions on decision making, often induced by these nefarious tactics.3

Moreover, the FINRA Foundation, in collaboration with neuropsychologists at Rush University Medical Center, conducted a behavioral experiment4 involving a fictitious government agency reaching out to older adults about a potential compromise of personal information related to their Social Security and Medicare Benefits. Because this was a behavioral experiment and not a survey asking people about whether they have been scammed, underreporting was less of a concern than in similar studies. Ultimately, the results indicated that many older adults are vulnerable to fraud and scams, even when they are not experiencing cognitive impairment.

Tactics Used by Scammers

Trending data from FINRA’s Securities Helpline for Seniors, as well as historical data from the FBI’s Elder Fraud Report, reveals the following investment scams utilized to defraud seniors and vulnerable adults:

  • Grandparent Scam – Perpetrators acquire personal information about seniors’ grandchildren (or other relatives) through social media or by purchasing stolen data from cyber thieves. They then call these seniors using the acquired information to impersonate the victim’s grandchild (or other relative), and request immediate financial assistance to resolve an emergency (e.g., accident that resulted in personal injury, arrest by law enforcement). These criminals may also use AI technology and voice cloning to impersonate the voice of the grandchild (or other relative).
  • Romance Scams/Pig Butchering – Criminal perpetrators use social media – e.g., Facebook, Instagram, X (formerly known as Twitter) – and/or text messages through encrypted messaging platforms (e.g., WhatsApp, WeChat, Telegram) to contact seniors or vulnerable adults in an attempt to gain their trust, befriend them and form a relationship. The perpetrator then will present an investment scheme involving crypto or another type of investment with a promise of high profits. These tactics are commonly called romance scams or pig butchering. (For more on pig butchering scams, please review the FINRA Investor Insight article ‘Pig Butchering' Scams: What They Are and How to Avoid Them.)
  • Firm and Registered Representative Imposter Scams – Perpetrators obtain information from BrokerCheck or online searches to impersonate a legitimate registered representative and/or member firm. The imposters then use the registered representative’s name, firm name or CRD information to create a fictitious website that appears legitimate, and then induce seniors or vulnerable adults to send money, posing as a financial professional offering what appears to be legitimate investments.
  • FINRA or other Federal Agency Imposter Scams – Perpetrators hold themselves out fraudulently as government or FINRA staff in an effort to obtain sensitive information from the senior or vulnerable adult, such as account information.
  • Computer Takeover – Perpetrators employ cyber tactics such as computer viruses or pop-up screens on victim’s electronic devices. In these cases, the criminal acts as though they are assisting the victim to resolve a virus, instructing the victim to download a program to their device so that tech support can assist in removing a computer virus. When the victim complies, they provide the perpetrator with full access to their computer, which can give the scammer access to passwords or login credentials for financial accounts. With this information, the perpetrator can make withdrawals and transfers from the victim’s accounts, sending the money to third parties.

Recent data also suggests criminal perpetrators are becoming more sophisticated in their approach by involving multiple types of financial institutions before sending money overseas – thereby potentially evading scrutiny by securities firms. For example, a perpetrator may direct the victim to transfer money (via first party wire) from the victim’s securities account to their personal bank account, before directing it to be sent overseas.

Consequences for Victims

The consequences of elder investment fraud can be devastating, both financially and emotionally. Victims can lose their life savings and they often do not have the time and opportunity to recoup the money lost. In some cases, victims do not just suffer financial loss but may also suffer the aftermath of a compromised identity and damaged credit. Additionally, the emotional toll of being exploited can lead to feelings of shame, guilt and mistrust. A study5 funded by the FINRA Foundation found that nearly two-thirds of fraud victims reported experiencing at least one non-financial outcome from their fraud experience such as depression, anxiety or other mental health issues ranging in severity, some to a very high degree. 

Furthermore, once someone has been the victim of investment fraud, they are more likely to be targeted again. There are several theories about the cause of chronic victimization. In some cases, the victim may be targeted by the same criminal multiple times. An example of this is a case where a victim may lose money to one type of scam, and then is contacted again by the same criminals unbeknownst to the victim, who offers to help recoup the losses in exchange for an upfront fee (i.e., advanced fee scam). The FINRA Foundation, the AARP Fraud Watch Network and Heart+Mind Strategies engaged in a four-phased study of chronic victimization.6 The researchers hypothesized, among other things, that chronic fraud victims hope the scam will ultimately work out and, if it does not, the next “opportunity” will succeed; they also may not be aware, or willing to admit, they are involved in a scam. The study found there are four key elements that may lead to chronic victimization, including situational factors, triggers, motivations and ability. For example, someone who is recently divorced may be feeling rejected and looking for companionship and in this emotional state, be more vulnerable to a romance scam. As noted in the study, breaking the cycle of fraud for those who are chronically victimized may be accomplished by addressing and disrupting one or more of the four key elements – thereby disempowering the criminals and preventing further victimization.

Importance of Awareness and Prevention

Targeted efforts to reduce financial insecurity, and increase financial literacy and cognitive health, are important for the prevention of elder financial exploitation.7 Some FINRA research shows that financial literacy and knowledge about scams may be protective factors for this type of exploitation.

For example, a FINRA Foundation study indicated online educational interventions may reduce susceptibility to investment fraud among US adults.8 Shortly after subjects received either an educational video or educational reading material about investment scams, they displayed lower willingness to invest in a fraudulent investment when presented pitches that employed techniques used by fraudsters (compared with a control group that did not receive either educational intervention). Importantly, the educational messages did not affect subjects’ willingness to participate in legitimate investment opportunities. The same study showed the initial effects lasted for several months and then decayed over time. Six months after the initial educational materials were provided, individuals were not better at identifying fraudulent investments than those who had not received the educational material. This points to the need for regular educational interventions. Although the initial, deterring effects did decay over time, they were strengthened in subjects who received a second, follow-up intervention, which may suggest that repeated educational interventions could help increase consumers’ ability to recognize fraudulent investment opportunities.

Similarly, member firms report that there is an increase in reporting potential elder financial exploitation shortly after associated persons receive training regarding red flags. Member firms have indicated these reports may decline over time and increase again after another training. This highlights the importance of regular educational interventions for member firm associated persons as well.

Along this theme, FINRA has noted some member firms have increased the volume of scam and fraud awareness articles their financial professionals provide to clients. Some member firms host educational seminars to teach their clients the hallmarks of prevalent scams, sometimes engaging third parties to assist (e.g., FBI, law enforcement, AARP). In addition, some member firms have implemented measures such as requesting clients to provide “security” words to be used to confirm certain transaction requests or alert the financial professional to potential financial exploitation.

Although prevention is important to combatting financial fraud, unfortunately, this type of fraud still occurs. According to the FINRA Foundation’s Taking Action Guide,9 it’s important for advocates, including member firm personnel, to have a victim-centered approach. The Taking Action Guide notes tips for creating a victim-centered approach – including acknowledging the trauma the victim is experiencing, asking open-ended questions and explaining that fraudsters use powerful persuasion tactics. This approach can help to reduce the feelings of shame and guilt often experienced by victims of financial fraud. It is also important to use language that keeps the blame where it should be, with the criminal perpetrators.10


With the aging US population, elder financial exploitation is on the rise. Criminals work to exploit certain vulnerabilities more common in elderly individuals, including manipulating their emotions to gain their trust and convincing them to “invest” in fraudulent schemes. Tactics used by perpetrators are becoming more sophisticated as access to advanced technology increases. The consequences of being a victim of financial fraud go beyond just financial losses and can impact every aspect of a person’s life. Regular educational interventions to increase scam awareness for both investors and financial professionals are paramount to preventing individuals from becoming victims of financial exploitation.

Additional Resources and Information

Safeguarding Seniors:

Avoiding Fraud

1 Federal Reserve. (2024, March 24). Distribution of Household Wealth in the U.S. since 1989.

2 Federal Bureau of Investigation. (2024, May 2). 2023 Elder Fraud Report.

3 AARP, FINRA Investor Education Foundation and the Stanford Center on Longevity. (2016, May 5). Emotions Increase Susceptibility to Fraud in Older Adults.

4 Yu, L., Mottola, G., Kieffer, C. N., Mascio, R., Valdes, O., Bennett, D. A., and Boyle, P. A. (2023, September 22). Vulnerability of older adults to government impersonation scams. JAMA Network Open, 6(9).

5 FINRA Investor Insight. (2023, March 7). Recovering from Investment Fraud: Start with These 6 Steps.

6 AARP, FINRA Investor Education Foundation, and Heart+Mind Strategies. (2021 March). Addressing the Challenge of Chronic Fraud Victimization.

7 Yu, L., Valdes, O., Boyle, P., and Mottola, G. (2022 July). Who's at Risk? Financial Fragility May Put Older Adults at Risk for Scams.

8 Burke, J., Perez-Arce, F., Kieffer, C., Mascio, R., Mottola, G., and Valdes, O. (2021 March). Can Educational Interventions Reduce Susceptibility to Financial Fraud?

9 FINRA Investor Education Foundation and National Center for Victims of Crime. (2021). Taking Action: An Advocate’s Guide to Assisting Victims of Financial Fraud.

10 AARP, FINRA Investor Education Foundation and Heart+Mind Strategies. (2022 June). Blame and Shame in the Context of Financial Fraud.