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Investment Fraud Abuses TrustCon Artists Use Trust and the Lure of Money to Scam their Victims
Scams have saturated our lives since the advent of the internet. Is affinity fraud on the shelf collecting dust or is it lurking behind the flurry of internet scams?
Affinity fraud is alive and well. This type of fraud refers to investment scams that target members of an identifiable group such as religious, ethnic, elderly or professional. The fraudster is a well trusted member of the group and holds an arsenal of psychological ammunition to prey on trusted fellow members. Their investment scam abuses the trust and friendship of those in that group. In March 2008, a CTV W-Five investigative report states that affinity fraud is one of the fastest growing types of fraud in North America. Anatomy of a Con ArtistCon artists choose their victims very carefully. They prey upon those who believe in them without question and can not find anything negative about them. They come from diverse backgrounds from solid family upbringing to broken homes. They are well educated or high school drop outs. Their natural ability to influence and manipulate people around them is what sets them apart. Also, the manipulation leaves them without feeling guilt or remorse. The ScamOnce the fraudster has cemented trust with his group members the wealth building investment pitch is given to a select few. Whatever the pitch, the benefits from investing appear too good to resist. It promises to be low risk and has impressive financial gains. It’s also exclusive and available to only those in that particular group. The con artist knows that people in close groups trust each others' advice, tips and recommendations. A con artist knows how to selectively choose a few key people so that they will persuade others to invest in this “limited time” offer. The fraudster uses their names to other possible investors to dispel any skepticism. At times, the fraudster will return some monies to the first key investors so they share the news about how wonderful this opportunity is in order to unknowingly recruit others. As Time Goes OnAfter a certain period of time, investors will get restless but they fear talking amongst each other as they do not want others to know that they now have doubt in this “trusted” person. When investors start asking questions, the fraudster will generate excuses to appease them. Again, because of the trust factor, they believe what has been given to them. When victims have realized they have been deceived, rather than notifying authorities they tend to keep quiet for a multitude of reasons from shame to embarrassment to the fear of it looking bad within their community group. Meanwhile, the fraudster gets richer and moves on to repeat the scam with other groups in new places. Sometimes they operate in multiple locations simultaneously. Protect YourselfA good mantra to hold onto is if it is too good to be true then usually it is. The greater the potential return from an investment means you have a greater chance at losing your money. Promises of fast profits are a classic warning sign of fraud. Another sign of affinity fraud is when the investment is made available for only certain individuals and often with only a limited amount of shares that can be purchased or a quick time deadline. Bottom line, if you have money to invest, talk to a professional investment planner. Betrayal of trust is hardest to take when it’s committed by someone you had faith in. If you feel you may be a victim or know someone who may be a victim of affinity fraud then report it in order to prevent others from becoming victims. For more information or to report suspected fraud, contact the F.B.I., the Royal Canadian Mounted Police or your local police authorities.
The copyright of the article Investment Fraud Abuses Trust in Abuse is owned by Karen Stephenson. Permission to republish Investment Fraud Abuses Trust in print or online must be granted by the author in writing.
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