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 Montana, affinity fraud is considered a serious criminal offense. State statutes, particularly those related to securities fraud, prohibit deceptive practices that involve the solicitation of investments from individuals through false representations or by exploiting trust within a group. The Montana Securities Act, enforced by the Montana Commissioner of Securities and Insurance, provides the regulatory framework for securities transactions and includes provisions to protect investors from fraudulent schemes, including affinity fraud. Additionally, federal law under the Securities and Exchange Commission (SEC) also addresses affinity fraud, particularly when it involves Ponzi or pyramid schemes. Victims of affinity fraud in Montana are encouraged to report the fraud to the Montana Commissioner of Securities and Insurance and may also have the option to pursue civil remedies. The state's legal system allows for both criminal prosecution and civil actions against perpetrators of affinity fraud to recover damages for the affected investors.