Careful people are the target
Adults over 60 lost $4.8 billion to fraud in 2024, according to the FBI, up 43% from the year before. The average loss per victim over 60 was $83,000. That's an entire retirement account. Investment fraud was the single biggest category by dollar amount.
A retirement investment scam that moves that much money isn't run by amateurs. Some of these operations are designed by professionals who do this full-time, and they're built specifically to fool careful people. I know that because someone close to me went through it.
How it happened to someone I know
She's someone I work with. She's smart, she's careful with her money, and she asks good questions. She found a Facebook group focused on investing that looked like a real community, with active members posting updates, people sharing testimonials, and phone numbers you could actually call.
She called them. The people on the phone were professional and patient and they answered her questions. The website looked like a real brokerage, the kind you'd see on TV. They charged a management fee that was higher than any real brokerage would charge, and they explained it by saying their program worked so well. That higher fee made them sound more legitimate, like a real firm actually making money.
So she opened an account and wired her money in. The platform showed her balance going up and down, more up than down, moving the way real markets tend to move. After a couple of weeks she wanted to test it, so she made a small withdrawal. They sent the money back and it landed in her account. That was the part that made her believe. She put more money in.
Months later she asked for a larger withdrawal. This time they told her she'd have to add more money to the account to cover crypto gas fees. That's when the alarm bells went off. She started digging, she called around, she pulled every thread she could, and it became clear that none of it was real. The Facebook profiles, the staff, the testimonials, the people on the phone, the brokerage. All of it was fake and the money was gone. It was a significant portion of her life savings, and she had to take a second job to start saving again while she figured out what to do next.
She called them. She tested with a small withdrawal. She checked everything she knew to check. The scam was built to pass every test a careful person would run.
The playbook has a name
The FBI calls this pig butchering. The name comes from the idea that the scammers fatten you up with trust before they take everything. They build the relationship slowly, they let you have small wins, and then they take it all at once. There's no rush on their end. They're patient because they know the payoff is your retirement savings.
The FBI recently ran an operation called Level Up that targeted this exact scam. They identified 4,300 people who were actively being scammed, and 76% of them didn't know it. Some were liquidating their 401(k)s. Some were selling their house and moving into a rental so they could put more money into these accounts. They thought they were making smart financial decisions.
The sequence is always the same. Build trust over weeks or months. Launch a professional looking platform with real price movement. Allow a small withdrawal so you can confirm it works, then push for larger deposits. When you try to pull real money out, there's always one more deposit, one more fee, one more thing you have to do first. Then they disappear.
The call that looks like it's from your brokerage
The second common investment scam works completely differently, and it's hitting people who have accounts at places like Fidelity and Schwab. You get a call and the caller ID shows the actual name of your brokerage. The person says there's suspicious activity on your account and they need to verify your identity, so they send a verification code and ask you to read it back.
That code is a one-time login code, and every one of them arrives with a warning that says not to share it with anyone. They're counting on you to override that warning because the person on the phone sounds urgent and official. You share the code, they get access to your accounts, and they wire the money out. When you call the bank to report the fraud, they deny the claim, because their position is that you gave away your access voluntarily.
The FBI calls this one the phantom hacker scam, and it runs in three phases. First a fake tech support call, then a fake bank call, then a fake government call to seal it. Each call confirms the story of the last one, so by the end of the third one you're convinced.
There's one more thing worth knowing. Once you've been a victim, a second scam is often waiting. Criminals buy lists of known fraud victims, called sucker lists, and trade them in criminal networks. Someone on that list gets a call from a fake law firm or a fake recovery service offering to get the money back, usually for an upfront fee. Crypto fraud victims lost another $9.9 million to fake recovery scams in 2023 alone, and that's just one category. If anyone contacts you unsolicited claiming they can recover your money, you're looking at another scam. That's the rule.
Five red flags and what to do
Guaranteed returns or no risk. Real investments carry risk, and anyone telling you they have something that can't lose money is lying. There's no debate about that.
You didn't initiate the contact. Legitimate investment firms generally don't cold call or cold message you, so if someone reached out to you first, be suspicious.
Pressure to act now. Real opportunities don't expire in 24 hours. Pressure is a manipulation tactic.
A request to keep the investment secret, especially from a spouse, a family member, or a financial advisor. Legitimate investments don't need secrecy.
Having to put more money in to get your money out. That's the moment you stop.
If you get a call from someone claiming to be from your bank or your brokerage, hang up. Call the number on the back of your card, because that's the real number. Don't call back the number that called you.
If it does happen to you or someone you know, act fast. Stop all transfers immediately and call your bank's fraud department right away. Wire recalls can sometimes happen in the first 24 to 72 hours, and after that window the chances drop to almost zero. Report it to the FBI's Internet Crime Complaint Center at IC3.gov, file a report with the FTC at reportfraud.ftc.gov, and contact your state attorney general's office. Please don't feel ashamed. The people running these operations are professionals with scripts, call centers, fake websites, and fake personas. Reporting protects you, and it helps protect other people from getting scammed later.
Why this lands so hard on people near retirement
Part of it is that you're in a season of life where you have real money to lose. You've been accumulating for 30 years and now there's something worth taking. The other part is that people in this age range are looking for better options. They want reliable income outside of the stock market, they've heard about alternatives, and they're open to learning. That desire is completely rational. The scammers know how to exploit it, so they offer the thing people are already looking for: quick, consistent returns with no market exposure, all professionally managed. The desire is real and the offering is fake.
Real income producing alternatives do exist. Dividend paying stocks are one. High yield savings accounts are good when you might need the money quickly. Bonds can provide steady cash flow.
People ask me about secured mortgage notes because I talk about those often. The idea is that you act as the lender on a real estate deal and you get a first position lien that's recorded with a title company. It's how banks make their money. You don't hear about it often because Wall Street doesn't make anything when you do it yourself. A lot of people don't know you can hold these inside a retirement account. It's boring and it's documented, and it involves real paperwork you can hold in your hand and real property you can touch. Nobody's rushing you, the money goes to a legitimate third party title company, and the lien is recorded in the public county records. That's the difference between a real investment and a fake one.