The success of ‘affinity fraud’ schemes appears to depend in some measure on the advocacy of individuals who become excited having already received high initial returns on their investment. For these individuals the illusion is complete and they become agents or ‘point people’ energized to encourage others to share in the great and often limited time opportunity.

The affinity fraud scheme presents an intricate web of deceit that draws otherwise good and decent folk in and one might suggest that for most who become agents or point people their involvement is in good faith and their actions are well intentioned. Most of these folk apparently have no idea of the part they play in the scam. They are but pawns in a game where the chess player sits at both sides of the table. The situational ethic arising around greed in these kinds of investment scams has been commented on somewhat extensively elsewhere. It is perhaps however fair to say that without greed as an essential ingredient these schemes would not prosper.

To the point that Gresham allegedly (and perversely) states that his investment success was due to the “Lord’s blessing” it is the case that the Lord has blessed His people with free will and discernment. It would seem as if the diligence part in deciding whether or not to invest is often set aside in favour of someone’s good standing and their recommendation. Folk then presuppose that the diligence part has already been done. One might suggest therein lies the sting of the affinity fraud scheme.

Relationship. Lack of diligence. Presupposition. Greed. It would appear that these are the essential ingredients of the recipe for a successful affinity fraud scheme.

Without the agents or point people the scheme cannot spread its wings. Let’s look a little closer…It would seem that there are 3 levels of engagement as an agent or point person and it is perhaps instructive to note that it is quite possible for agents or point people to be blissfully unaware of the part they are playing in the scam.

At the first level, if Joe mentions to his friend Rob that he has invested in a scheme and recommends that Rob consider taking a closer look at the investment opportunity and leaves it at that, that’s one thing. It’s up to Rob what he does next. Joe has no further involvement other than to feel a vicarious sense of guilt if Rob did subsequently invest and lose some or all of his money.

At the second level, if Joe encourages Rob to invest in the scheme and lets Rob know that he (Joe) is being paid a finders fee from the investment manager then if Rob goes ahead and invests at least he (Rob) knows that Joe is receiving a commission. When the scheme collapses Rob has probably lost his investment but however he feels about things at least he knows that Joe was upfront about receiving a finders fee from the investment manager.

At the third level, if Joe encourages Rob to invest in the scheme and does not let Rob know that he (Joe) is being paid a finders fee then if things subsequently go sideways Rob will in all likelihood feel there has been a betrayal of trust at the hands of his friend Joe notwithstanding also experiencing the general sense of feeling cruelly cheated that all concerned, including those agents or point people who were not ‘in the know’, will experience. Yes, agents or point people can also be cheated in these affinity schemes.

There are certain lines that can be crossed in this whole unfortunate scenario knowingly or unknowingly and the sobering aspect of it all is that no-one gains from these schemes in the final analysis.

It would be good to see some clearer guidelines emerging from the faith community in terms of preventing affinity fraud schemes. These guidelines should not be filed in a ring binder – they should be communicated across the country as part of a concerted effort to educate people within and without the faith community of the dangers of affinity fraud.

Perhaps in the interim a watchdog commission could be established across the faith community that would exist to help blow the whistle on affinity fraudsters. It would be a watchdog commission that is a safe place and a direct connect to the requisite authorities. Idealistic? …maybe. But why not? It might just be an opportunity to bring the faith community closer together working in common purpose to prevent these things from happening.

Also, bear in mind within the faith community there are folk who will not speak up because they have a fear of a number of things and the spiritually abusive environment that exists in some areas of the faith community ensures a so called ‘ministry of containment’. The people who have something serious to share need someone they can go to without fear of recrimination.

We need to send a clear message to affinity fraudsters that their efforts are bound to fail and that there will be serious consequences for their actions. Some of the investors in these affinity fraud schemes have indeed been widows and they have lost everything.

It needs to stop.