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 Colorado, affinity fraud is considered a serious criminal offense. The state's securities laws, enforced by the Colorado Division of Securities, aim to protect investors from fraudulent investment schemes, including those targeting specific groups based on age, religion, ethnicity, or other common bonds. Affinity fraud is often prosecuted under Colorado's anti-fraud securities statutes, which make it illegal to engage in any fraudulent or deceitful acts in the offer, sale, or purchase of securities. Additionally, Colorado Revised Statutes (C.R.S.) 18-5-504 specifically addresses the crime of securities fraud, which can encompass affinity fraud. Perpetrators can face severe penalties, including fines and imprisonment. The state also encourages victims of affinity fraud to report these crimes to the authorities, including the Colorado Division of Securities and local law enforcement. Despite the close relationships within groups, it is important for individuals to recognize the importance of involving law enforcement to prevent further harm and to seek justice for the financial losses incurred due to such scams.