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.

BREAKING DOWN '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.

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