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 West Virginia (WV), affinity fraud is considered a serious criminal offense. State statutes, particularly the West Virginia Securities Act, provide a legal framework for prosecuting individuals who engage in fraudulent investment schemes, including affinity fraud. This type of fraud is characterized by the exploitation of trust within specific groups, such as religious or ethnic communities. The law in WV requires that all securities offered or sold in the state must be registered, and individuals selling these investments must be licensed. Violations of these regulations, including engaging in deceptive practices or making false statements to investors, can lead to severe penalties including fines and imprisonment. Additionally, federal laws, enforced by the Securities and Exchange Commission (SEC), also apply to affinity fraud cases, offering further protections against these schemes. Victims of affinity fraud in WV are encouraged to report such activities to the West Virginia Securities Commission and may also have civil remedies available to them, including the possibility of recovering losses through litigation.