Social Networking Isn’t Safe for Investors

Affinity fraud is nothing new in the investment word. It involves targeting faith-based organizations, professional associations and community service groups. The victims of affinity fraud are tied together through common interests, professions, faith, hobbies and lifestyles. Scammers then use this common ground to establish a relationship with their victims, making stealing much, much easier. Now affinity fraud has become even easier for scammers with social networking sites like Facebook, LinkedIn, Twitter and even online dating sites like eHarmony.

Online social networking is good news for scammers because they don’t have to worry about that pesky “sixth sense” some people get when they are physically near someone who is up to no good. Limiting the social interaction to online encounters in the beginning helps scammers get past the initial phase of their plan — gaining your trust. Not only is it easier to gain your trust, but they can work at it any time and from anywhere.

According to Melanie Woods, the Indiana Investor Education Coordinator, the average Facebook user has connections with 80 community pages, events and groups. Each one of these connections is an opportunity for scammers to take advantage of the individual.

While it’s a dangerous world out there, there are a few precautions investors can take to avoid affinity fraud:

• When accepting friends, make sure you know who they are. Remember, just because they ask to be your “friend” online, they are not your friend in the investment world.
• Don’t include sensitive personal information on your profile such as address, phone number, birth date and employment history. Even citing your political or religious views can be dangerous, as it gives scammers common ground to begin establishing trust.
• Watch for “red flags” like no risk/high return promises, offshore-based operations and e-currency website payment requests.
• As always, if you are considering investing, check into the reputation of the firm or individual as well as the investment itself before investing.

If you believe you have been the victim of affinity fraud, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.