How Affinity Fraud Works

Everyone, in some way or another, is connected to a group, association or community-based organization. Our interests, backgrounds, and other factors will naturally lead us to those affiliations that best serve our needs. Race, culture, and religious beliefs also play a role in identifying us as members of unique groups that we often come to trust.

Affinity Fraud is a type of scam that takes an emotional as well as financial toll on its victims. This is any one of many scams that are designed to prey on individuals based on the trust of the conspirator. The deception may be intentional, as in the case of an investment scam infiltrator, but could just as easily be the result of an enthusiastic, but misguided, participant in a scheme.

Affinity fraud poses a danger since it undercuts the usual warnings about investment schemes promoted by strangers. In these cases, the fraud may come to your attention as the result of a contact from a friend, colleague or someone who inspires a bond of trust.

What Is Affinity Fraud?

In short, affinity fraud is a form of fraud which occurs within a specific group of people. Some examples of these groups could be;

  • Ethnic minorities
  • Language minorities
  • Religious groups
  • The elderly
  • Professional groups

The person running an affinity fraud operation will often join the group in some official manner. Doing this naturally puts people at ease with the new member and a certain degree of trust is given. These people do this for a living and they are very good at gaining trust so it’s not an easy thing to spot in advance. They quickly work to gain more and more trust by identifying themselves as friends of the group’s leaders or they become friends with the leaders so that they can use that relationship to gain even more trust among the members. This type of affinity fraud can take quite a while to set up but the payoffs can be lucrative.

Another equally effective pitch, if the con artist is not a member of the group, is to lull members into a misplaced trust by selling first to a few prominent members, then pitching the scam to the rest by using the names of those previously sold. The effect is the same: Once the connection to the group is understood, the natural skepticism of the individual member is overcome, and one more group name is added to the sales column. Once a victim realizes that he or she has been scammed, too often the response is not to notify the authorities but instead to try to solve problems within the group, because victims are often in denial or too embarrassed to report the crime to authorities.

The key point to remember is that the person committing the crime will often pose as a successful member of the target group. By doing this, they can gain the trust of other members of the group and enlist them into the fraudulent scheme. Affinity fraud can often be introduced to people by someone they already trust, someone who has been lured in by the scammer in order to gain more members. These people can be religious leaders, successful entrepreneurs, influencers, new lovers, friends, your idols…

Examples of Affinity Fraud

Many affinity fraud operations involve Ponzi or pyramid schemes, where new investor money is used to make payments to earlier investors to give the false illusion that the investment is successful. Here are some examples of the various types of affinity fraud that may be seen:

  • Religious Groups. Unsuspecting members of a religious organization may be targets of fraudsters, as religions may emphasize the claim that identifying with oneself as a believer establishes positive values such as honesty and good will in the minds of believers. Some religions discourage followers to think critically in general, in order to prevent them from challenging the ideology of the religion itself. An impostor can exploit the assumption shared by believers that those who identify themselves as such would not descend so far as to harm a fellow believer.
  • Ethnic Groups. People with a strong sense of cultural identity are an alarmingly common target for affinity scams. One way is to claim that the government has allocated billions of dollars in reparations for slavery. All they would have to do is send their name, date of birth, address, phone number and their social security number. The release of personal information opens the doors to identity theft and crimes involving these identities. Because this demographics may also be religious demographics running their own churches, they are also vulnerable to the religiously based scams outlined above.
  • Gernder Groups. In a cynical example of people embracing feminism to sell things, MLM systems often use messages of female empowerment to recruit women into their pyramid schemes. Typically, this is done by promises to women that this “revolutionary business opportunity” will enable them to become financially independent business owners, often through a message that is overlayered with contemporary “girl power” mottos when in reality they get into a cycle of debt. Housewives and wives from the military are particularly popular targets for this, as they often do not have a permanent job and instead receive a grant from their husbands. There are similar systems aimed at men and based on defining their masculinity.
  • Intelectual Circles. In intellectual circles, affinity fraud is often perpetrated by opinion leaders, scientists and ideologists in order to force the agreement of political and economic views. In this context, common characteristics such as intellect and status are not explicitly referred to, but are understood as being related. In this scheme, we can just as well enter the realms of major political and world economic decisions. Since high interest rates are good for the rich, the elites could push for a policy of money scarcity. The financial interests are so coordinated that even if the reality of fiscal and monetary contraction paints a bleak picture for the general population, this policy is still advocated by those in power.
  • Political groups. We will put forward here an example of right wing mail order fraud. This is a common scheme which targets those with a right wing opinion. They are asked for payments towards a cause, and those firm in their opinions will readily give money. When failure is noted, fraudsters will usually avoid blame and ask for more money in order to succeed. Victims will keep paying out. The left-wing variety does not occur around as often because leftists typically tend to question and argue too much among themselves. These groups, in turn, may not be as closely interconnected as the right wing groups.
  • Collectors groups. In this day and age, when fandoms can inspire as much devotion as religious groups, there are of course peddlers who infiltrate fan communities. The goal is to exploit the love people have for a fictional world or whatever the collectability is. This group often includes teenagers with little to no experience in dealing with people who try to take their money away from them.
  • Idol groups. Given the cultural influence of movie stars, musicians, sportsmen and other celebrities in the modern world, they have long been the target of peddlers of all stripes, not only of people trying to get their money, but also of those trying to get into the wallets of their fans. Occasionally the celebrities themselves are also involved. On a more friendly level, this is why celebrity endorsement is a thing. If you hire a famous figure as a spokesperson for your product, that person’s fan base will prick up their ears and give your product a second look they might not otherwise have.

How is Affinity Fraud Different From Regular Fraud?

The main difference between affinity fraud and regular fraud is that the former is always targeted at a specific, often minority group of people. These groups are usually ones which are closely knit by trust, loyalty and respect, and a fraudster can easily intercept these groups by either becoming a member or by gaining the trust of the leader or a few prominent members of the group.

The types of fraud which can be committed are no different to frauds which are taking place elsewhere. One key difference is that the benefit of the criminal committing affinity fraud is usually more lucrative. It is often the case that many more people will jump on board than in a regular scam scheme.

How To Avoid Affinity Fraud

Affinity fraud may sound like a very intimidating situation, especially to those who are within a closely bonded group such as an ethnic community or a religious group. However, whilst it is good to be vigilant, there is no need to live in fear because there are many ways in which you can actively avoid falling victim to a scam like this.

  • Check everything. If you are offered the opportunity to make an investment or become involved in something which you believe not to be legitimate, do not be afraid to spend time exploring the offer. It is crucial that you check out every detail and perform research around the offer to determine whether or not it is a scam. Keep in mind that due to the nature of affinity fraud, the person making the offer to you may be someone who you trust and respect, and that doesn’t mean to say that they are the fraudster, they could have been conned into thinking that this was a good investment.
  • Know the lingo. If you are presented with an investment which promises ‘a quick return,’ ‘an amazing profit’ or seems to good to be true, then it probably is. These terms are used to make a scam seem like a profitable deal and can get inside the minds of vulnerable individuals. Be wary of anything that promises a ‘guaranteed profit’ because nothing in life is guaranteed, after all. Some of the other phrases you might hear from these fraudsters are that the investment will be ‘risk free’, this is another tell tale sign that what you are seeing is fraud.
  • Ask for documentation. Those who are out to con others will not run the risk of leaving any sort of paper trail. Therefore, if you are offered an investment, you should always ask for everything to be detailed in writing, and to be signed. If the person offering you this, refuses your request, you should be suspicious. Any company that is above board will want everything recorded and filed. The same suspicion should be raised if you are informed that the investment should be kept a secret.
  • Look out for time pressure. If the person who is offering you this investment opportunity appears to be in a hurry, then this is a sign that something is wrong. Often if what you are being offered is fraudulent, the con artist will want you on board as quickly as possible. Fraudulent opportunities quickly dissapear and so the con artist is in a time pressure and will spin you lines such as ‘a limited time deal’ or ‘act fast.’
  • Be wary of unknown emails and social contacts. In this digital age, it is not common for scammers to show up on your screen. Do be aware of any message you receive which could be a possible scam.

Conclusion

Affinity fraud is a cruel way of using the community and faith of people to draw them into a scam which will see them lose money and often times, dignity. Fraudsters will often target closely knit or vulnerable groups such as the elderly or religious groups. Once they have intercepted the group, they will gain the trust of members by becoming friendly with the leader or by involving highly ranked members of the group, in their schemes.

Whilst these fraud schemes are common and sadly, all too often successful, there are ways in which you can avoid becoming the next affinity fraud victim. Our simple guidelines will assist you in becoming aware of this type of fraud and will help you to stay well away from such schemes.

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