Financial fraudsters have long preyed on the elderly. But with roughly 10,000 Americans turning 65 every day, the elderly population is growing so quickly that instances of financial fraud affecting the elderly are becoming ever more common.
Kathleen Rehl, a certified financial planner and the author of "Moving Forward on your Own: A Financial Guidebook for Widows," remembers all too well the time a financial fraud hit someone close to her.
She was visiting her elderly aunt, Eileen Richey, who she said lived "a very moderate lifestyle." On this visit, Richey asked Rehl to look at an investment she had made. Rehl smelled trouble, and when she saw what it was, she realized something was seriously amiss.
"She said, 'Well, I bought Iraqi dinars," Rehl recalled. Apparently her friend's nephew, whom she described as "such a nice young man," had told Richey and others about this can't-fail investment opportunity. Richey knew her CDs were yielding very little, so when they matured, she handed over several thousand dollars to buy dinars—"a huge amount for her," Rehl said.
Not surprisingly, the dinars never materialized. The last time Richey tried to call the nephew, she got no answer, and there was no answering machine.
"She said, 'I feel so dumb. I trusted him," Rehl recalled. The icing on the cake: Richey told her the nephew apparently scammed his aunt as well.
Many seniors living on fixed incomes in the current low interest rate environment feel strapped, which makes them more susceptible to deceptive pitches. Add in the many holiday season scams related to charitable giving, and this is a particularly vulnerable time for senior citizens.
"All of these things combine to make the population vulnerable, and then it's the end of the year. It's just perfect timing in that way," said Nora Dowd Eisenhower, assistant director of the Office of Older Americans at the Consumer Financial Protection Bureau.
(Read more: Privacy doesn't trump financial abuse of elderly)
Common scams include emails that appear to come from reputable charities but actually contain malware that steals the victim's identifying information. Sometimes scammers pick up personal information about their targets from Facebook and use it to make their pitches more credible. Scammers also call seniors and purport to represent legitimate charities, exacting pledges and credit card information.