How to Avoid Affinity Fraud

It is easy to follow a crowd, especially a crowd of friends. Scam artists know that they can start with one person and attract a group. They use this principle to their advantage with affinity fraud, an investment scam that targets leaders and other members of a particular group. The scam artists join the group or fake membership to gain members' trust. Follow the steps to avoid being lured into a deal that promises quick, easy money.

Instructions

Difficulty: Easy

1. Act wisely by asking questions. Get the facts about investments before buying. Check every statement thoroughly. Remember that the person trying to get you to invest may have been fooled into believing the legitimacy of the investment.
2. Be careful about investments that guarantee unbelievable profits. The old saying about things being too good to be true is especially sound advice. Investigate investments that are said to be risk-free. Watch out when little or no risk is involved but high and fast profits are promised.
3. Insist on seeing the plan in writing. Legitimate investments are usually in writing, but fraudulent scams are rarely written. Look for the warning sign when people tell you no one had time to write the details of the investment. Run and don't look back if people tell you to keep the investment confidential.
4. Take your time to consider the offer. Just because one person made money or said she made money does not guarantee that others will be as profitable. Refuse to bend to high pressure, especially "once-in-a-lifetime" opportunities. Be careful about those "rare" opportunities that are based on confidential information.
5. Ignore "can't miss" investment notices sent via email from people you do not know.

Tips & Warnings

• Avoid investing based only on the recommendations of members of religious, ethnic or organizations to which you belong.