Investment fraud, like telemarketing fraud in general, often targets older people, who may be least able to afford the hit to their savings accounts. As the AARP and the Consumer Federation of America recently reported to the SEC, "[b]ecause their prime earning years have passed and the sources of extraordinary income may be one-time life events, older Americans are less able to repair the damage when they are the victims of fraud or abuse."(10)

Fraudulent investment promoters typically use aggressive marketing tools such as infomercials and telemarketing to reach consumers. They also flout state and federal securities registration laws. That way, their promotional materials--including profit projections, use of proceeds, and risk disclosures--are not subject to routine regulatory scrutiny.(11) Consumers may believe that a scheme's slick promotional materials with fine-print risk disclosures fully set forth the investment's profit potential and risks. Instead, the Securities and Exchange Commission warns that "investors must be aware that their first line of defense against telecommunications technology and other securities fraud is their own diligence and skepticism in evaluating a proposed investment--especially one not registered with the [Securities and Exchange] Commission."(12)