Are You an Easy Mark?

The more you know, the less likely you are to become a victim of investment fraud. 

Getty Images/iStockphoto

Who is most likely to fall prey to investment fraud?

Older men who are risk-takers, open to   investment  pitches and see accumulating wealth as a key achievement in life.

That's according to   a new study  sponsored by AARP's Fraud Watch Network that surveyed 1,028 investors, nearly a quarter of whom were victims of fraud. The study's goal is to identify risk factors or behaviors that make someone fall for fraudulent investments.

Subscribe to the AARP Money Newsletter for more on finances, scams and fraud

"It doesn't mean that if you do any one of these [risk factors] you are going to be a victim. It doesn't even mean if you do all of them you will necessarily lose money to investment fraud," says Doug Shadel, the study's coauthor and the state director for AARP Washington. "But the more of these characteristics that you manifest, the greater the risk of you being a victim."

Research shows that investment fraud victims are often men 70 and older, Shadel says. And according to his report, there are other risk factors that fraud victims share. Among them:

They believe money equals success. It's not unusual for Americans to view wealth as a sign of success. But fraud victims are far more likely than other investors to say that acquiring money is one of life's important achievements.

It's not clear whether this belief was held before being scammed or the result of losing money to fraud, Shadel says. Still, by placing so much value on acquiring wealth, these investors might be more susceptible to schemes that promise big returns.

They welcome sales pitches. Even after being scammed, victims tend to be on the lookout for investment opportunities that others don't know about. This is exactly the type of person that   scammers  target and hook with exaggerated promises, the report says. Some victims told researchers they remained interested in new investment opportunities even after being defrauded because they needed to make up for the losses they suffered.

They're attracted to unregulated investments, believing such opportunities will be the most profitable. Yet the majority of investment frauds involve brokers and securities that are not registered with regulators such as the U.S. Securities and Exchange Commission. That's why investors are always warned to make sure their broker and the investments being offered are registered with government regulators.

They give off signals that they're easy targets. Victims are more likely than other investors to receive unsolicited emails, calls and letters offering investment opportunities. This suggests victims may be signaling that they want to receive sales pitches, the report says. For instance, victims tended to trade investments more frequently than other investors, an indication that they're open to hearing about new ones.

They're comfortable doing business with strangers. Fraud victims are far more likely than others to invest with a stranger over the phone or through emails. This indicates they may be making financial decisions without first talking to a trusted adviser. "One of the things that makes people vulnerable to fraud is when they respond to calls or emails from strangers and make investments based on those calls,” Shadel says.

Shadel says he hopes the study causes people to review their own investment behavior.

"Be aware of your own mindset, your own behaviors and your own demographic profile that may put you at risk," he says. "And if you are in that category of higher risk, you have to be more judicious when investing."

To see if you may be vulnerable to investment fraud, take the  Fraud Watch Network's online quiz.