Investment scams on the rise among boomers

"Just as often as a formal organization, it's a gathering of friends," Struck says.

Fraud at free-lunch seminars

Fraud at free-lunch or free-dinner seminars targeting seniors is on the rise, with state securities regulators reporting three times as many fraud cases involving these events in 2010, compared with 2009.

Many free-lunch and free-dinner seminars are marketing tools used by legitimate investment professionals selling legitimate investments. But some of these events are outright investment scams run by con artists, Webster says.

"A lot of fraud can start off in a free-lunch seminar. It can be a first point of contact," Webster says.

The best way to guard against fraud is to check out the credentials of the person running the free-lunch or free-dinner seminar.

"A lot of folks offering seminars aren't licensed to sell or give advice regarding securities," Kitzi says. "Before you invest a single dollar with any investment, seniors, anyone, should call their state securities regulator and ask about the person and the product."

Warning signs of a con

A telltale sign of an investment scam is a high-pressure sales pitch urging investors to act immediately. Don't be fooled.

"'You have to act today. It won't be here tomorrow.' That's the close for almost every scam," the SEC's Schock says. "A legitimate investment will be there tomorrow, next week and next month."

Another sign of investment fraud is the promise of too-good-to-be true returns.

"There's no such thing as a risk-free investment. Any investment will carry a degree of risk," Webster says. "What you'll see in fraudulent pitches is a promise of risk-free investments or low-risk, high-return investments. Those should be warning signs."