Affinity fraud: How to avoid being scammed by a friend
One of the nastiest types of fraud is being ripped off by someone you know well and who you trusted.
It is often called affinity fraud. That is when a scammer targets a group of people, using personal contacts to con them. It could be a church group, a sports team or as community of retirees.
The fraudster joins the circle of people, gains their trust and then offers some investment that is said to be too good to miss.
One of the most famous examples is Bernard Madoff. He targeted the Jewish community and charity organisations in New York.
But there have been some notorious examples in New Zealand.
In 2002 and 2003, church groups in the Bay of Plenty lost at least $14 million in a scam.
But the Commission For Financial Capability has some advice on how to avoid being scammed.
Here are some tips:
Sorted.org.nz has lots more advice on how to avoid various types of fraud.