They say wisdom comes with age. But wisdom, it would appear, is no match for fear and greed, especially when interest rates are historically low, IRA balances are flat and incomes are unfortunately fixed. Yes, more than five million senior citizens reportedly fall prey each year to various forms of financial fraud -- including the old free-lunch offer.

And the problem is likely to get worse before it gets better, says Consumer Action, which earlier this month published "Just Say No! to Senior Scams," an online brochure that helps seniors spot and avoid fraud.

For one, there will be lots more seniors to scam in the years to come: 77 million baby boomers are marching toward retirement. And scammers are becoming increasingly sophisticated and creative in their efforts to separate this nation's elders from their hard-earned money.

Consider, for instance, the recent case of D.W. Heath & Associates. That California-based firm raised some $140 million from more than 800 elderly investors who were lured to workshops with the promise of a free lunch and then the promise of safe and secured notes with guaranteed returns of between 5.5% and 8% per year. The food was real, the notes were not. And now hundreds of elderly investors are out their nest eggs.

"Scammers are always going to be creative. Mr. Ponzi was creative for his time and scammers today are creative for these times," says Briane Nelson Mitchell, associate regional director (enforcement) in the Pacific Regional Office of the Securities and Exchange Commission. That office, as part of a pilot program with federal, state and local authorities has shut down 15 frauds over past two years, many of which were aimed at seniors and one of which was the Heath case.

Scammers are using the Internet to prey on people. And they are using psychology and research about seniors. Consider, for instance, the firm that sends e-mails to advisers promoting workshops that will reveal the decision process seniors use to make their financial investments. And they are making schemes appear real and above board.

Mitchell, for instance, speaks of one case in which a company called Rainmaker Managed Living offered seniors and others a chance to invest in assisted-living facilities and earn a guaranteed 25% annual return. And though the investment made sense at one level, what with all those aging boomers needing a place to live at some point, it was nothing more than a Hollywood stage set.

"There was nothing behind the false front," he says.

So what then are some of the more common scams around today? And more important what can seniors do to avoid such scams? According to Mitchell, many scams fall under what the SEC calls "affinity fraud." Affinity fraud, according to the SEC Web site, refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly or professional groups.

"The fraudsters who promote affinity scams frequently are -- or pretend to be -- members of the group," says the SEC. "They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse."

And Consumer Action points out three of many scams to which seniors are especially vulnerable:

-- Before accepting legal advice or entering into binding agreements, check with your state bar association about the person you are dealing with. Never buy legal services from door-to-door salespeople or telemarketers.

-- Never volunteer information to someone who calls you on the phone. Hang up on people who will not identify themselves. Before you wire money, check with other family members to make sure there is a legitimate emergency.

-- Companies offering Medicare drug cards are not allowed to call, send e-mails or come to your home unless you ask them. If you are interested in the benefits available to you as a Medicare beneficiary, visit the federal government's Medicare Web or call 1-800-MEDICARE (1-800-633-4227).

So what should you do if you suspect that you are being scammed? Mitchell says follow an age-old adage: If it sounds too good to be true, it probably is. Ask questions. Ask if the investment is registered with the SEC and state securities agencies. Determine how long the company has been in business. Conduct your own search of the company and principals on the Internet using such search engines such as Google or Dogpile. Ask for written materials.

And by all means, get a second opinion. But remember that is some of these scams it is the "trusted advisers" who have been duped first or are doing the duping themselves.

And in cases where you've been scammed, Mitchell suggests that you file a tip or complaint with the SEC at a minimum. And at a maximum, you should call any and all federal, state and local authorities, including the district attorney's office or attorney general's office, until you receive satisfaction. "You have to find someone with a friendly ear and a good track record," he says.