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Senior citizens are being lured into riskier investments — and often outright scams — as carefully laid retirement plans have been scuttled by five years of low interest rates.

Government regulators and advocacy groups say unscrupulous dealers are taking advantage of a growing fear among seniors that they will run out of money in their final years of life. That’s in large part because many seniors have parked their cash in safe investments, such as government bonds, where returns have barely kept pace with inflation. As a result, their savings are stagnating as their life expectancy grows — and that is making many older Americans increasingly desperate.


In Georgia, state regulators nabbed a man last year who bilked seniors out of nearly $16 million by promising to generate high returns with investments in foreign currencies. In South Carolina, regulators are pressing charges against a former insurance agent who they say was able to scam 17 people out of more than $1 million by advertising certificates of deposits with returns of just 4 percent. A similar scheme in Virginia attracted more than $11 million from seniors hoping to beat bank interest rates that have fallen below 1 percent.

‘‘What we really have now is a combination of the fraudulent seller with the needy buyer,’’ said A. Heath Abshure, commissioner of the Arkansas Securities Department and president of the North American Securities Administrators Association. ‘‘Right now, because of interest rates, the fraudulent sellers aren’t having any issues finding a buyer who wants to believe the lie.’’

On Thursday, the federal consumer watchdog agency called for greater transparency in the way financial advisers market themselves to seniors.

The Consumer Financial Protection Bureau found such advisers claimed more than 50 different types of so-called senior certifications. Some require college-level course work, while others can be obtained in a weekend. The CFPB said that more rigorous standards for training and conduct as well as greater supervision of these advisers are needed.


CFPB director Richard Cordray said that during roundtable discussions across the country, he has been struck by the vulnerability of many older Americans.

‘‘Seniors may assume that a financial adviser has their best interest at heart, when that is not necessarily the case,’’ he said. ‘‘If they fall prey to a scam, they may be too embarrassed or too frail to pursue legal action.’’

Seniors have long been a favorite target for fraudsters. People 60 and older make up 15 percent of the population but are estimated to account for 30 percent of investment fraud victims, according to AARP. They are more likely to have lump sums of easily accessible cash, a lifetime of savings intended to last through their golden years. Many seniors use the interest on those savings to cover their daily expenses and maintain the nest egg for emergencies or inheritance.

But that has gotten harder to do in the aftermath of the financial crisis. The Federal Reserve began slashing interest rates in 2008 and has kept them near zero ever since in hopes of stimulating consumer spending and boosting the economy. The effort has paid off in many ways, spurring a rebound in housing and a pickup in construction hiring.

For many seniors, however, it has meant a sharp drop in income. Government data show investment earnings accounted for nearly 10 percent of income for Americans aged 65 and older when the recession began. In 2011, the most recent full year available, it made up just 6 percent of seniors’ income. Instead, they have become more reliant on Social Security, pensions, and public assistance.


‘‘Monetary policy is all about making trade-offs,’’ said Joe Davis, head of Vanguard Investment Strategy Group. Low interest rates have benefited borrowers, but ‘‘clearly that comes at the expense of savers.’’

Tracking the number of senior scams is difficult. Regulators say they rely on complaints to ferret out fraud, but often victims are too embarrassed to report their case or don’t know who to call. The cases they do investigate range from legitimate brokers making unsuitable recommendations or glossing over disclosures to con artists hawking phony products. Regulators say many have tailored their pitches to play off the frustration over low interest rates.

In particular, government and industry regulators said they have received complaints about annuities, which are insurance contracts with fixed payments, that carry heavy penalties for early withdrawal. Such products aren’t ideal for seniors who need easy access to their cash, but brokers can earn hefty commissions on their sale.

Regulators also urged seniors to be wary of promissory notes and unregistered real estate investment trusts. Red flags include free-lunch seminars on investing and a requirement to buy now.

The consequences of low interest rates for seniors has been one of the main criticisms of the Fed’s monetary policy. In a Senate committee hearing earlier this year, Republican Senator Bob Corker of Tennessee said the central bank is ‘‘basically punishing people who’ve done the right things.’’


But older Americans aren’t the only ones hunting for higher returns on their investments. Fed Governor Jeremy Stein recently noted that institutional investors are also ‘‘reaching for yield’’ with increasingly speculative products, such as corporate bonds and real estate trusts. Such actions can create bubbles that destabilize the entire economy, he said — as evidenced by the most recent financial crisis.

Fed chairman Ben Bernanke has defended low rates by arguing they provide a paradoxical benefit: They help spur demand to get the economy get back on its feet, which will eventually result in higher interest rates across the board.

‘‘You’re not gonna get strong returns in an economy that is fundamentally weak,’’ he said before Congress. ‘‘The best way to get sustainable high returns to savers is to get the economy back to running on all cylinders.’’

And some risk-taking has paid off. Stock markets have reached new highs, partly because weak returns on bonds have pushed more investors into equities. In fact, some risk may be a necessity as life expectancy grows.

John Sweeney, head of planning and advisory services for Fidelity Investments, said the firm generally recommends that clients entering retirement budget for another 30 years. And the only way to make their money last that long is to invest in the markets.

‘‘Even though [stocks] have been a volatile place to be . . . it’s important for them to understand the role of equities,’’ he said.


Still, some seniors are reluctant to take that risk. And low returns leave them with only two other options to make ends meet: work longer or spend less.