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PrintMore Bang for Your Buck: Affinity Fraud
One hundred twenty-five church members lose more than $7 million. Two and a half million is stolen from a group of senior citizens. Hundreds of African American investors lose their life savings. The list goes on and on -- all victims of affinity fraud.
Linda Sherry, Consumer Action
"You hear every day about people being taken."
With affinity fraud, people are targeted as members of a group.
Susan Wyderko, Securities and Exchange Commission
"The fraudsters come in and they market an investment product to the group."
Several government agencies keep their eyes open for affinity scams. Susan Wyderko of the Securities and Exchange Commission says as the economy suffers, scam artists tend to step up their attempts.
Susan Wyderko
"It's important to check out any investment recommendation before you spend your money on it."
...even if the tip comes from a trusted friend.
Susan Wyderko
"Don't be fooled by the fact that this person may have, may really believe in the investment recommendation."
You can call the state regulatory agency to find out if any complaints are filed against the company proposing the investment. Check into the individual or organization asking for your money.
Susan Wyderko
"If you see something advertised as a guaranteed high return, run, don't walk, just run from the investment, because chances are you've come face to face with a fraud."
Sometimes legitimate groups can negotiate better deals with organizations because of their membership size. But when you are presented with an opportunity for your money, you owe it to yourself to check it out thoroughly.