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 California, affinity fraud is considered a type of financial fraud or investment scam that specifically targets groups of people, and it is illegal under both state and federal law. California's penal code addresses various forms of fraud and theft, which can be applied to affinity fraud cases. Additionally, the California Corporations Code regulates securities and investments within the state, and any fraudulent activity related to securities would fall under its purview. The California Department of Business Oversight (DBO) enforces these laws and can take action against individuals and entities involved in such scams. At the federal level, the Securities and Exchange Commission (SEC) also investigates and prosecutes affinity fraud, as it often involves securities fraud. Victims of affinity fraud in California are encouraged to report the crime to local law enforcement, the DBO, or the SEC. They may also pursue civil remedies, which could include suing the fraudsters for damages. It's important to note that even respected community leaders who unknowingly promote these schemes can become liable if they are found to have contributed to the perpetration of the fraud.