Have you ever received an email or phone call promising the investment opportunity of a lifetime, if you'd only be so kind as to share your bank account information and social security number? If so, then you were a potential victim of financial fraud, a crime that comes in many shapes and sizes.

Senior citizens are a growing target for financial scammers. Recent studies have estimated that about 20% of unsuspecting retirees become victims of financial fraud. According to one of those studies, seniors lose more than $2.9 billion a year to financial fraud. But since many cases of fraud go unreported, the actual numbers may be far higher.

With the increasing proportion of aging baby boomers -- who account for about a quarter of the U.S. population -- criminals have a wealth of potential victims. One in every five Americans over 65, or about 7.5 million people, has lost money through financial fraud.

Why are retirees so vulnerable? As described in our article 'How Our Aging Brain Affects Our Financial Decisions,' after age 60, one’s cognitive facilities weaken, making the elderly more susceptible to poor decision making. No matter how well-educated we are, financial literacy and savvy decrease as we age, according to Harvard University economics professor David Laibson.

Seniors tend to rely more on the assets they've accumulated, as they may no longer be earning a steady income. Combined with being intellectually vulnerable, this makes them 'attractive prey for would-be scammers,' claims Raj Date, Special Advisor to the Secretary of the Treasury and acting head of the Consumer Financial Protection Bureau.

And, with more North Americans retiring in debt, they're that much more likely to be tempted by fraudulent 'get rich quick' schemes. Recent surveys have found that 15% of retired Americans are having difficulty paying their credit card bill, rent or mortgage.

All these factors can lead to financial desperation, making retirees particularly easy targets of financial fraud. But, don't let yourself fall victim. You can help prevent financial fraud by following these four steps:

1. Beware Of 'Safe' Returns Higher Than 6%

Unless you're investing in high-yield stocks such as REITs or MLPs, use caution if you come across a financial guarantee which promises a 'secure' return of 6% or more. According to Pat Huddleston, founder and CEO of the private investigative firm Investor’s Watchdog, scammers currently lure retirees by offering returns between 6% and 8%. This yield is not outrageous, but with North American interest rates currently hovering around 3%, it’s wise to probe how a credible financial institution can offer so much more than the average bank. Before you buy, verify the organization's credibility. Often the money you invest is capital you can't afford to lose.

2. Know What You're Investing In

If you’ve never heard of a Turkish Eurobond that gives quarterly returns 8.5%, or a gas fund that's guaranteed to produce $8,500 in monthly income, it’s probably because these securities don't exist. If somebody gives you a sure-fire investment lead, familiarize yourself with it before you commit to a purchase. Practice informed investing as a general principle. Turn to credible websites like our sister site, StreetAuthority, for well-researched investing tips from recognized stock pickers.

3. Avoid The 'Suckers List'

As a rule of thumb, if it seems too good to be true, it probably is (a scam). With that in mind, don't sign up for sweepstakes, incredible travel giveaways or suspicious free gift offers. According to the National Consumers League fraud center, once the scam bait has been taken, your contact information may end up on a 'suckers list,' where it's collected and then sold to outside parties. From that time onward, you will likely find yourself receiving a plethora of fake mailings and phone calls.

These are harmless enough, albeit annoying. But, as we age, our ability to discern the credible from the not-so-credible decreases. Retirees in the early stages of diseases like dementia or Alzheimer's may be that much more prone to fall for illegitimate phone or mail money-grabbing tricks. To find out whether the offer you're receiving is legitimate, you can read about the latest financial schemes at both the Federal Trade Commission and National Consumer's League websites.

4. Beware Of The Grandparent Scam

One frightening scam comes as a call from someone pretending to be a family member needing money. The criminals often do intensive research on the potential victim's family, so their story may sound credible. For example, they might pose as a grandson who was arrested on a trip abroad and needs money wired immediately. If this happens to you, ask the person if you can call them back later and immediately check the facts with your family. Never give money to anyone without verifying their identity.

The Investing Answer: Avoiding financial fraud may seem like common sense, but the elderly must be extra careful about every financial decision. Stay informed and do extensive research before you sign away any of your retirement savings. Of course, there are plenty of other scams out there, including phony charities asking for donations, advance-fee loans, fake checks and identity theft. You can read more about how to protect yourself from identity theft in this InvestingAnswers feature, '5 Frightening Facts About Identity Theft.'