All this Internet openness has made it much easier for people to be preyed upon by con artists who specialize in affinity fraud, using someone’s connection to certain groups to gain their trust and ultimately their life savings.
The North American Securities Administrators Association (NASAA) recently warned investors to look out for shady investment deals pitched by people they connect with on social networking sites. State security regulators warn that con artists are using the information you post to make highly targeted pitches within your social group.
“We issued the warning because we had more and more people calling in saying they had lost money over the Internet,” said Jack E. Herstein, NASAA’s president.
For years, con artists have found victims through offline social networks such as faith-based, civic, community and professional groups. They join the groups and ingratiate themselves, making connections in person. This takes time and you have to come face-to-face with your victims.
Online fraudsters can target more people in less time and never have to travel. Last year, Maine’s security regulator issued a cease-and-desist
order for an online investment scam operating on the island nation of Vanuatu in the South Pacific. The scam targeted people participating on chat sites popular within the deaf community.
However you get pitched an investment, here are some red flags to watch out for, according to NASAA:
The most common affinity groups targeted were elderly, retired and religious groups, according to the study conducted by Marquet International, a security consulting firm. Just keep in mind that by sharing small details of your life, you are making yourself more vulnerable.