What is affinity fraud?

Fraud in our communities continues to be a hot button topic. Recent examples of such fraud have, for example, involved senior officials at religious institutions gaining the trust of their congregants before defrauding them of millions of dollars. This type of scheme is called affinity fraud, and it is real. 

Affinity fraud is a type of fraud that targets a group of individuals that share a similar characteristic or attribute. The setting can vary, but similarities are usually based on religious beliefs, racial groups, ethnic communities or professional designations. The most common groups to target are the elderly or retired and religious groups. 

The principal approach to affinity fraud is to target a group and solicit money, investments or donations from the members, utilizing peer pressure techniques, resulting in a significant portion of the group falling victim to this fraud.

Many affinity frauds have the same characteristics as a Ponzi scheme in that they scam money from the investors.  The primary difference, however, is that an affinity fraud is directed at a specific group of people, while traditional Ponzi schemes are not.

To discuss your needs with a PwC professional contact a member of our Forensic Services team by clicking here.