Con-artists are using flattery to encourage older people to part with an average of £32,000 for unauthorised and fraudulent investments.
The City regulator is warning people aged over 55 to be cautious over unsolicited callers putting on pressure to sign up to a "special deal".
Scammers often praised victims for being "knowledgeable investors", the Financial Conduct Authority (FCA) said.
A survey suggested a lack of confidence in spotting scams among this age group.
If someone invests their cash with an unauthorised firm, they will have no protection from the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) which protects them if something goes wrong with a regulated firm.
The FCA said that new pension rules, which allow those aged 55 and over to cash in their pension pot, could be seen as an extra opportunity by fraudsters to target people in that age bracket.
Mark Steward, director of enforcement at the FCA, said: "Be alert to the warning signs like being contacted out of the blue, promises of low risk and/or guaranteed above market returns, special deals just for you, time pressure and, very often, flattery."