Crooks have bilked trusting New Zealanders out of more than $60 million over the past five years in "affinity frauds" - investment scams which target members of a close-knit group or community - the Securities Commission said today.
Thursday, July 1st 2004, 8:20AM
by The Landlord
Commission chairman Jane Diplock said affinity fraud was a problem in New Zealand with five serious cases occurring over the past five years.
"In each case millions of dollars have been stolen from people who belong to church or cultural groups," Diplock said in a statement.
"Affinity fraudsters exploit our tendency to trust people who belong to the same group as we do."
The scam worked by convincing members of close knit groups to put money into an investment scheme. Often the crooks will say some profits will go to a charity or other worthy cause. In some cases the victims are paid "interest" from money obtained from new investors giving the illusion that the investment is successful.
