We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is an Affinity Fraud?

Tricia Christensen
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Affinity fraud refers to different scams perpetuated on a group of people who are specifically connected to each other by race, religious background, occupation, family, gender or age. The person or people perpetuating affinity fraud exploit these connections, and in using the commonalities of a particular group, create a scheme that will be most appealing to that group. The end goal of the criminal is to steal money from participants, and it’s an unfortunate and frequent occurrence in many parts of the world.

There are varied types of affinity fraud. For instance, a criminal might target the families of people who have died in the armed services. He then might solicit donations on behalf of a monument to include all their names. Naturally, such a monument will never be built. This type of affinity fraud has occurred pretty frequently in the US, especially after or during wars. Criminals play on the emotional nature of this request and can take thousands of dollars in donations for phony or fictitious monuments. It’s one of the worst kind of fraud because it deliberately exploits the suffering of these people.

Another type of affinity fraud involves what is called a Ponzi scheme. This offers an investment opportunity to a specific group, and in the beginning, it pays the first few investors a large sum of money. Ponzi schemers then target others to solicit more money. Early investors may benefit but are encouraged to invest more, and later investors usually have all their money stolen.

The returns come out of a bank account set aside for the purpose and are never actually the result of a real investment. A Ponzi scheme ends if the people involved are caught, if suspicion about the scheme grows and slows down investments, or if the schemers “run” with what money they’ve collected. This doesn’t necessarily have to be affinity fraud, but often, the criminal will target one group to secure initial investments because they want to give that specific group “a break they deserve.”

Another form of affinity fraud is based on the pyramid scheme. People make an initial investment, perhaps do well, and then are asked to recruit others. “Others” tend to be friends and family members or business associates. People at the top of the pyramid get money for recruiting others, and goods or services sold or offered are almost never of much value. The real money lies in the fees people pay to get in on the scheme. Top-level folks of the scheme make a percentage of not only their own recruits, but also every person their recruits enlist. The bottom investors are told stories of the fabulous amount of money to be made, but tend to make very little if any.

To avoid affinity fraud, always check the credentials of people asking you for money. Don’t take the person’s word for it or their credentials at face value. Be suspicious of businesses that don’t mention what products they sell and give you a big sales presentation first on what type of money you’ll make. Be especially wary if an investment garners huge returns at first, which seem disproportionate to moneys invested. Never trust a person who is offering you a “deal” on an investment because of your ethnic, social, religious or business circumstances.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Tricia Christensen
By Tricia Christensen , Writer
With a Literature degree from Sonoma State University and years of experience as a SmartCapitalMind contributor, Tricia Christensen is based in Northern California and brings a wealth of knowledge and passion to her writing. Her wide-ranging interests include reading, writing, medicine, art, film, history, politics, ethics, and religion, all of which she incorporates into her informative articles. Tricia is currently working on her first novel.

Discussion Comments

Tricia Christensen

Tricia Christensen

Writer

With a Literature degree from Sonoma State University and years of experience as a SmartCapitalMind contributor, Tricia...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.