Affinity Fraud

AAA

DEFINITION of 'Affinity Fraud'

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.

INVESTOPEDIA EXPLAINS 'Affinity Fraud'

This type of scam leverages and exploits the inherent trust within the group. For example, a fraudster may target a specific religious congregation. 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.

RELATED TERMS
  1. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  2. Straw Buying

    When an individual makes a purchase on behalf of someone who ...
  3. Mini Madoff

    Financial con men that are accused of or have commited crimes ...
  4. Promoter

    An individual or company that, for a fee, helps raise money for ...
  5. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with ...
  6. Pyramid Scheme

    An illegal investment scam based on a hierarchical setup. New ...
Related Articles
  1. Online Investment Scams Tutorial
    Economics

    Online Investment Scams Tutorial

  2. What Is A Pyramid Scheme?
    Active Trading

    What Is A Pyramid Scheme?

  3. The Biggest Stock Scams Of All Time
    Investing

    The Biggest Stock Scams Of All Time

  4. What is the difference between an in-store ...
    Savings

    What is the difference between an in-store ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center