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To make matters worse, investors rarely receive all of their money back. The Mitchells only got about $10,000 back. Hundreds of lawsuits have been filed trying to recover a fraction of the money stolen by Madoff, now serving a 150-year prison term.

“Unfortunately, if there’s money to be returned, it’s generally not dollar-for-dollar, so it may end up being pennies on the dollar, or sometimes there’s no money left at all,” Ms. Schock said.

Ponzi schemes typically prove confusing to understand, because the organizers present secretive and complex strategies. These scams are not registered with the SEC, and they offer high returns with supposedly little or no risk. They also show consistent results, a red flag for markets such as the stock market where wide swings are the rule. Investors might notice difficulty receiving payments and issues with paperwork.

“The biggest defense against a con artist is to ask a lot of questions, because they don’t want questions to be asked,” Mr. Rotblut said. “They don’t want to be challenged.”