The 4 Elements of Affinity Fraud
Canada's award winning investigative journalism show, W5, has an excellent piece on affinity fraud.
The W5 summary of their investigation into affinity fraud can be read here. There is also a broadband connection to the actual television show, in which I am interviewed about affinity fraud.
According to W5, the four elements of an affinity fraud are:
"Affinity Fraud is a scheme that has four main ingredients. Which mixed together, can produce the perfect crime. Ingredient Number One - a trusting group of victims. Because church goers are trusting by nature this group had been particularly hard hit.
The front man is the second ingredient, someone who acts as a salesman within the group.
Which brings us to the third essential ingredient--the trusted insider. Someone within the church who will vouch for "the front man" Without the insider, the Affinity Fraud often could never occur. Not just anyone can walk into a church and win people over. Sometime he's an accomplice, sometimes just a patsy.
And the final ingredient -- the master mind. The person who orchestrates the scheme and after the money is collected, generally spirits it offshore where it can't be found by authorities."
This is a good description of the mechanics of the affinity fraud.
The picture can be made more clear by focussing on the first element. Why does a group who trust each other on one dimension, say religious beliefs, then come to trust each other on a another dimension, say investment advice?
On the surface, there is no connection. Yet, con criminals take advantage of this "halo effect" all of the time.
But there is also another logical confusion or illusion at work, something that we have talked about before, the confusion between "My friend is trustworthy and so is not lying to me" versus "My friend is trustworthy and could be mistaken".
Thomas Bayes
was a 18th century philosopher who published small mathematical treatise on conditional probability. The practical import of his theorem was divined earlier by David Hume, who realized that when we are presented with testimonials that seem extraordinary we should focus on the possibility that the person testifying to this rare event is mistaken. That is, we should compare in our minds the chances that a "miracle" happened with the chances that the person was honestly mistaken about what they saw or reported.
