Types of Securities Fraud You Must Avoid-Affinity Groups
Affinity group fraud is another example of mistaken trust.Investment fraudsters will exploittheir victim’s age, religious, ethnic, sexual, or professional identityto gain your confidence knowing that it’s human nature to trust people who are like you.
Affinity fraud bypassesthenatural distrust we have for schemes promoted by strangers.
Theusual method of sellingthefraud is to enroll a trusted, leading member ofthegroup (who's seldom an investment expert) into sellingthefraud totheremainder ofthegroup.
Thelure to invest isthesupposed profits that will somehow benefitthechurch or professional organization that you want to support.
For example, a respected church leader is sold an investment.Thescam artistthen informs this leader that if church members also purchasetheinvestment,then profits can benefitthechurch or its favorite charity.
Theleader unwittingly promotesthefraud tothecongregation withthegood intention of benefitingthechurch.Thecongregation invests based ontheir trust fortheleader andtheir desire to supportthechurch.
Thecon man bypassestheusual distrust he experiences by usingtheaffinity ofthegroup.
Senior fraud is a specialized form of affinity fraud. Seniors are natural fraud targets becausethey've accumulated significant assets from a lifetime of saving and investing.
Low interest rates, rising health costs, and increased life expectancyhave forced many seniors to seek higher returns than conventional investments provide.
In addition,their age givesthem a common set of interests and concerns for fraud promoters to exploit through affinity.
This is an unfortunate combination of circumstances that makes this group a prime target for investment fraud.
$FINGERTANGO(06860)$ $ADTIGER CORP(01163)$ $WINDMILL GP(01850)$ $LUOYANG GLASS(01108)$ $Alco(00328)$ $KIDZTECH(06918)$
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