Define: Affinity Fraud

Affinity fraud is a type of investment scam that targets members of a specific group, such as a religious community, ethnic group, or social organisation. Perpetrators of affinity fraud exploit the trust and close relationships within these groups to gain access to potential victims and persuade them to invest money in fraudulent schemes. They often use affinity-based tactics, such as leveraging shared values, beliefs, or connections, to build credibility and establish trust with their targets. Affinity fraud schemes can take various forms, including Ponzi schemes, pyramid schemes, and fraudulent investment opportunities, and they may promise high returns or exclusive benefits to lure victims. Affinity fraud can have devastating financial consequences for victims, who may lose their life savings or suffer significant financial losses. To protect themselves from affinity fraud, individuals should be cautious of unsolicited investment opportunities, conduct thorough due diligence before investing, and seek advice from trusted financial professionals or regulators. Additionally, reporting suspected affinity fraud to law enforcement or regulatory authorities can help prevent further victimisation and hold perpetrators accountable for their actions.

Affinity fraud refers to a type of investment scam where the fraudster targets members of a specific group, such as a religious or ethnic community, professional association, or social club, exploiting their trust and shared identity to gain their confidence and deceive them into making fraudulent investments. The fraudster often poses as a member of the group or uses influential members to endorse the investment opportunity, making it appear legitimate and trustworthy. Affinity fraud can be perpetrated through various means, including Ponzi schemes, pyramid schemes, or the sale of bogus securities. Victims of affinity fraud may suffer significant financial losses, and the fraudster may face criminal charges for securities fraud, wire fraud, or other related offences. To combat affinity fraud, regulators and law enforcement agencies often work to educate potential victims about the warning signs and red flags associated with these scams, as well as investigate and prosecute those responsible for perpetrating such frauds.

A name for a type of scam that targets members of a specific demographic. Perpetrators may attempt to relate to or exploit characteristics common to the demographic. Targeted groups can include the elderly, ethnic groups, and religions. Perpetrators attempt to portray themselves as members of this group or people who can relate to the members of the group in order to gain trust and eventually money. Ponzi schemes and pyramid schemes are sometimes combined with affinity fraud.

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This glossary post was last updated: 11th April 2024.