God calls us to be good stewards and does not promise that every broker
who can “talk the Christian talk” has the character of Christ.
christians ripe for affinity fraud
Scams strike investors where they are most vulnerable. If you are a Christian or active in a church, temple or mosque, you are at risk. If you are a Christian or have Christian friends, please listen: scam artists target Christians like foxes target chickens. God calls us to be good stewards of what He entrusts to us, and does not promise that everyone who can “talk the Christian talk” has the character of Christ.
How, then, do you evaluate whether someone you know from church is offering a wonderful investment opportunity or only an opportunity to lose what it took you decades to save? Proverbs gives us a hint. "Plans fail for lack of counsel, but with many advisers they succeed." Make one of those advisers Investor's Watchdog, who has seen hundreds of scams and has the experience to recognize the warning signs.
It's not only Christians who are at risk of affinity fraud. Do you have any interests outside of work? Do you trace your heritage to another country? Few would answer “no” to those questions. Answering “yes” to any of them makes you a target for affinity fraud. NASAA, the North American Securities Administrators Association, puts affinity fraud at the top of its list of the top ten scams operating today.
The SEC defines affinity fraud this way: “Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are — or pretend to be — members of the group.”
Christians bond around their shared faith in Jesus. As hard as it is for the devout of any religion to comprehend, an affinity fraudster thinks no more of feigning belief in God or using the name of God in his scheme than he would about jaywalking. Investor's Watchdog has seen scams in which affinity fraudsters wept and brought church leaders to tears while delivering the supposed story of their salvation. Anything to establish credibility.
Members of ethnic minorities bond around the customs and language of the country of their ancestors. A recent enforcement action by William Galvin, the Massachusetts Secretary of the Commonwealth, highlights a recent affinity fraud against the Greek-American community. Other scams have targeted recent immigrants to the United States.
When it comes to investments, no one who is equal to your trust would be the least bit offended if you insisted on doing an independent investigation of the proposed investment before making a decision. In fact, you should pitch the independent investigation as a way to protect the friendship. “If this thing goes south,” you could say, “I’m afraid it would hurt our relationship. So, I’m going to check it out on my own and I’ll let you know what I find out.”
There is no limit to what a con man will do or say to separate a baby boomer or senior citizen from his or her nest egg. While the SEC and state securities regulators often bring affinity fraudsters to justice, those actions rarely make defrauded investors whole. Remember that Jesus counseled us not only to be as innocent as doves, but also as “shrewd as serpents.” Especially when you find your faith underlying your trust in a stockbroker or an investment promoter, investigate thoroughly. Protect yourself.
