Affinity Scams

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A type of investment scam in which a con artist targets members of an identifiable group based on things such as race, age, religion, etc. The fraudster either is, or pretends to be, a member of the group. Often the fraudster will be promoting a ponzi or pyramid scheme.

This type of scam leverages and exploits the inherent trust within the group. For example, a fraudster may target a specific religious congregation, community group, sporting club, or any other organization where trust and/or friendship have been established. Oftentimes, the person will try to acquire the help of the leader of the group to spread the word about the investment scheme. In this instance, the leader becomes an unwitting pawn in the fraudulent scheme.

To avoid being scammed from an Affinity Scam, Student Destinations recommends the following:

  1. Know your surroundings. If you are being approached about an investment opportunity, within a community/ group, that does not directly relate to investing, be cautious.
  2. Understand where the message is coming from. Is the individual financially affluent? Are they notorious for making smart investments in the past?
  3. Question why investment opportunities are being discussed within a group that has no affiliation to investing.
  4. Speak with an Investment Representative from your bank. There may be a financial product bias; therefore, speak with a few separately affiliated Investment Advisers to get feedback.
  5. Research the investment opportunity on Google. Write the company name with scam beside the name and review the results. The more pages dedicated to proving they are a scam, the greater chances it is a scam.
  6. Speak with family and friends who are outside of the group, that the investment opportunity is being presented, to find out if they have ever heard of the company presenting the opportunity.
  7. Be aware of the investment contributions; if it demands a periodic contribution then additional information should be requested.

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