This section identifies the groups and communities that are commonly targeted by fraudsters.
Clubs & Organizations
Fraudsters will often promote their scheme by befriending a respected member of a club or organization. Once the fraudster gains the confidence of this person, the fraudster can ask this individual to facilitate meetings or introductions to other members. Sometimes the fraudster will offer incentives to respected club members who are able to get others to invest.
If anyone associated with the club starts promoting a fraudulent investment, everyone in the club is at risk, including friends and family of club members.
Fraudsters strive for legitimacy by getting influential members of the community to trust them. They may also attend special events, appear at celebrations, or get involved in charity work to gain legitimacy and meet people. To attract investors from the community, the fraudsters offer exclusive investment opportunities, or link the schemes back to a shared country of origin or religious organization. People who feel there is something wrong with the investment are discouraged from reporting it to the authorities.
New immigrants are at risk as they may be more isolated from the larger community and could be less likely to seek outside advice. Members of ethnic communities who are looking to help people can also be targeted in a fraudster’s scheme.
Since pre-retirees are working and living an active life, there are many techniques fraudsters can use to lure these people into their schemes. It may be through advertising, an investment seminar, or at a work or community event.
Fraudsters use promises of high returns with little or no risk to attract people to their schemes. Pre-retirees feeling the pressure to ensure they make it comfortably through their retirement may be attracted to these types of pitches.
People nearing retirement that have savings, but fear they don’t have enough money to live the lifestyle they’ve worked hard to achieve, are at risk of being defrauded.
Often the fraudster will claim to be an ex-religious leader or at least someone who is very faithful to gain people’s trust. The fraudster’s involvement in the place of worship attracts members to invest. When promoting the investment, the fraudster may say that it is exclusive to the group, or claim that because it is a faith-based investment, it is exempt from securities regulation.
In religious organizations, there is often a reluctance to report fraud. The fraudster depends on this reluctance to get away with their scheme. There is also a risk of affinity fraud – people investing based on the advice or encouragement of others in the group – in religious groups and organizations.
Fraudsters target all denominations – no one is immune.
In small towns or cities, there is often a strong sense of community and people often trust and know their neighbours. To gain people’s trust, a fraudster may try to work through an established member of the community or get involved in an influential organization in order to get access to people.
When a fraudster who has the community’s trust offers an investment, there is a risk that the people who invest will promote the opportunity to their neighbours and friends. Fraudsters play on this trust to gain access to advance their schemes. Investment schemes can cause serious damage to the social fabric of a small, tight-knit community.
To gain the trust of a senior, a fraudster will offer help or become a close friend. Seniors without wide social networks are at risk because fraudsters often isolate people, discouraging them to report abuse or suspect investments.
Fraudsters target seniors because they often have savings: investments, property, pensions, etc. Seniors may be looking to maximize their investments to help get through retirement and leave money for their children and grandchildren. While anyone can be a victim of investment fraud or an unsuitable investment, seniors have less time to recover from a financial loss.