Affinity fraud

Frequently asked questions

• Are Ponzi and Pyramid schemes a type of affinity fraud?

  Affinity fraud schemes usually are associated with Ponzi and Pyramid schemes. Usually, affinity fraud scammers will contact a specific group such as a religious group. The fraudster will contact the leader of that group, tempting them to invest in a Ponzi or Pyramid Scheme. Once they have tempted the leader, they won’t have to do anything else because they will be recruiting more people to be part of that scheme. The scammer then receives the money from those who have also invested.

  A pyramid scheme is where a scammer will send an investment pitch to people it may interest. This pitch will promise high returns with very little investment from the person who has received the pitch. Due to the high returns, it can attract many people who fall for the scammer’s buzzwords. Those that invest in the scheme early will benefit from the rewards however, the people after will be scammed of their investment.

  A Ponzi scheme is similar to a pyramid scheme however a pyramid scheme is harder to recognise. A Ponzi scheme only requires a small amount that promises a high return with a high amount of money. A pyramid scheme is usually disguised as a product or service to receive more money in return.

• Different types of fraud schemes

  There are many different types of fraud to be aware of when you are trading online, with some more common than others. Imposter scams occur often and can happen to anyone. This is when a fraudster pretends to be a family member or friend. Sometimes, they can pretend to be the law or even the council.

  Online shopping scams are also a common type of scam. A website will pretend to be a retail site and publish fake advertisements, tempting you to buy the product. This is a very common scam as it is so easy to impersonate another website. Before purchasing products, you must research the company.

  There are many different types of fraud schemes and affinity fraud is one of many. Before you invest any of your money, enter details into a website, or send information through an email or text message, you must research everything about the company or individual before giving any information.

• How to spot affinity fraud schemes

  Although an affinity fraud scheme can be hard to spot, there are a few signs that will give it away. When reaching out to a leader, the scammer will offer you a “faith-based” investment, only available to your religious group or organisation. The scammer may also tell you that religious-based investments are not regulated. You can also spot an affinity fraud scheme when an unregistered advisor reaches out to your group. They will also advise you not to seek independent assistance with the investment.

  Affinity fraud is easy to go unnoticed. If you are the victim of affinity fraud, you must seek assistance and not try to sort it out yourself. The longer you leave it, the less likely you will be able to find the perpetrator.

• The steps to take after discovering an affinity fraud scheme

  When you have discovered an affinity fraud scheme, you must make other people aware of it inside your group. You should also stop paying additional fees after it is discovered. This may seem obvious, but it is something many people would continue doing to pay the money back.

  After the affinity fraud scheme has been detected, you must write down all of the details of the suspected fraudster. This includes the name, titles, position they claim to have, social media accounts, screenshots of all interactions, email addresses, phone numbers if used, all account information of the transaction, including transaction receipts and statements, exchanges of digital currencies and any other details you may deem to be relevant and could help you recover your losses.

  At Wealth Recovery Solicitors, we encourage you to report any affinity fraud schemes that may have occurred. Once you have reported the scheme, we can help with the process of recovering your losses. We would also help with the legal action that is required should the case go to court. You must keep as many records as possible about the affinity fraud scam. Not only will it help your case in court but, it will also help recover some of the money lost if not all of it.

• What to expect with affinity fraud

  When affinity fraud occurs, there are a few characteristics which will help you spot the scam before the fraudster succeeds. Usually, you can expect the fraudster to manipulate the trust between a group or community, often religious groups. The fraudster will also take advantage of the trust between other members. This will then give them access to other victims and will convince those into the affinity fraud scheme.

  There are many different tactics that an affinity fraudster will apply to gain money from a group or community. One of the tactics is to front as one of the members of the group, creating a fake account of the leader in that group. They will then use the reputation of that person to gain the trust of others in the community. Another common tactic for affinity scams is using a connection inside the group to help give them credibility. For example, they could ask for money from one person and give them the money promised. The person inside that group will then naturally promote this scheme, without knowing it is affinity fraud. It is common for affinity fraudsters to manipulate the values and beliefs of the target group. By doing this, they are building trust inside the group, only to manipulate this in order to make financial gain.