Fraud involving investments in religious causes is on the increase, with more than $1.8 billion lost on such schemes in the last three years, reports the Los Angeles Times (Aug. 8).
State security officials report that con artists in 27 states have taken advantage of at least 90,000 investors, with such deceived parties claiming that they are being targeted because of their religious beliefs, a practice known as “affinity fraud.” The schemes involve taking the money of new investors and using it to make interest payments to previous investors.
The key tactic that perpetrators use is extending an individual’s religious beliefs to a belief that the investment is valid, according to Deborah Bortner, director of securities in Washington. An article in the Washington Post (Aug. 11) suggests that the growth of religious affinity fraud today is documented by a similar 1989 study by the securities association and the Better Business Bureau, which showed that 13,000 investors had lost $450 million in religion-based fraud over the previous five years.
The increase may be because religious fraud today is harder to detect, with scammers get smarter by using slick marketing videos and other techniques. Today’s religious investors are also enamored by the promises of prosperity and are unwilling to question fraudulent groups, Bortner adds. Although not focusing on religious fraud, a recent survey finds that today’s investors are motivated by religion.
The poll, conducted by the Opinion Research Corporation International, found that 79 percent of investors describe themselves as religious or spiritual. Fifty-six percent of all U.S. investors said they include their faith or other personal ethical values in financial decisions, according to Religion News (Aug. 31), a release by the Pew Forum. Women were more likely to mix investing and religion (63 percent) than men (49 percent).
(Pew Forum, http://www.pewforum.org/news)