Affinity frauds target members of identifiable groups, such as the elderly, or religious or ethnic communities. The fraudsters involved in affinity scams often are—or pretend to be—members of the group.

Fraudsters may enlist respected leaders from the group to spread the word about the scheme, convincing them it is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraud they helped to promote.

These scams exploit the trust and friendship that exists in groups of people. Because of the tight-knit structure of many groups, outsiders may not know about the affinity scam. Victims may try to work things out within the group rather than notify authorities or pursue legal remedies.

Affinity scams often involve Ponzi or pyramid schemes where new investor money is used to pay earlier investors, making it appear as if the investment is successful and legitimate.

In Arizona, affinity fraud is considered a serious criminal offense. It is a type of investment scam that preys upon members of identifiable groups, often exploiting the trust and relationships within those communities. Arizona's securities laws, under the Arizona Securities Act, prohibit fraudulent practices in connection with the offer, sale, or purchase of securities. This includes making false statements or failing to disclose important information to investors. Affinity fraud may also fall under the purview of general fraud statutes in Arizona Revised Statutes, which address theft by deception and other fraudulent schemes. Additionally, federal laws, such as those enforced by the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC), also apply to affinity frauds, particularly when they involve interstate commerce or federal securities. Victims of affinity fraud in Arizona are encouraged to report the scam to the Arizona Corporation Commission's Securities Division, which is responsible for enforcing securities laws, and may also seek private legal action to recover their losses. It is important for individuals to conduct due diligence before investing and to be wary of investment opportunities that seem too good to be true, even if they are presented by seemingly trustworthy individuals within their own community.