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 Indiana, affinity fraud is considered a serious criminal offense. This type of fraud specifically targets members of identifiable groups, such as the elderly, religious or ethnic communities, by exploiting the trust within these groups. Indiana's laws against securities fraud, which would include affinity fraud, are governed by the Indiana Securities Act, codified in Indiana Code Title 23, Article 19. This Act prohibits fraudulent and deceptive practices in connection with the offer, sale, or purchase of securities. Affinity fraud may also be prosecuted under general criminal statutes related to theft, fraud, and deception. Additionally, federal laws, such as those enforced by the Securities and Exchange Commission (SEC), also apply to affinity fraud cases, particularly when they involve Ponzi or pyramid schemes. Victims of affinity fraud in Indiana are encouraged to report the crime to the Indiana Secretary of State, Securities Division, or to the appropriate law enforcement agencies. They may also have civil remedies available, such as filing a lawsuit to recover losses. However, due to the communal nature of the groups targeted, there is a tendency for victims to seek resolution within the group, which can hinder legal intervention and the prosecution of fraudsters.