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Affinity fraud

The catch

REMEMBER: IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS!

Affinity fraud refers to investment scams that target members of a group, such as community, religious, ethnic, elderly or professional groups. Examples include church congregations, members of old people’s clubs, community groups – and many, many more.

Often the swindler will claim to be a member of the group, and who better to trust with money than someone who has the same interests or background?

Sometimes the swindler will not be a member of the group but will sell the scam to a few prominent members in order to gain the trust of the others. Once a victim realises that they're in deep water, they often don't notify the authorities but keep the problem within the group, hoping that it will be solved amicably.

The life of the affinity swindler has grown much easier in recent years with the growth of the internet. Getting in touch with members of a specific group is now quick, easy and cheap with hundreds of websites, bulletin boards and chat rooms devoted to specific groups. And migrant groups are being specifically targeted with this type of fraud because they may be isolated and may have problems understanding the native language.

Protect yourself

Remember:

  • Beware if members of any group you belong to sing the praises of an investment deal. Swindlers often pay out high returns to early investors, which they do from using the money of new investors' money, just so that they will persuade others that the deal is one not to be missed.
  • Never make an investment based solely on the recommendation of a member of an organisation or religious or ethnic group to which you belong. Nothing beats doing your own research about the deal. Get all the facts about the company or individual, trawl through the internet, financial newspapers or company brochures and get your facts straight. Think about getting independent advice if you're in any doubt. For information on getting financial advice see – Getting financial advice.
  • Always make sure that the firm or person you use is on our Register and is allowed to give financial advice before handing over your money. If they aren’t regulated by us and things go wrong, you won't have access to complaints and compensation procedures. To find out if a firm is on our Register, see Check our Register.
  • Don't forget, there are very few risk-free investments.