Affinity Fraud Called a Destructive Crime at Conference
Contributed By By Heather Whittle Wrigley, Church News and Events
“Jane,” a member of an inner-city LDS ward in Salt Lake City, Utah, USA, was unmarried and in her eighties. She had spent her life working in regular jobs and had carefully saved enough money to retire. A few years ago she invested most of her savings with someone she thought she could trust. But her money ended up in a scam that conned investors out of tens of millions of dollars. Although her loss was a small part of that sum, it was almost everything she had saved.
Today, Jane tries to stay cheerful, independent, and self-reliant. She clips coupons and carefully counts her money out each time she goes to the grocery store to make sure she can pay for her food and cover the tax. But she has no opportunity to improve her financial situation, and will most likely struggle financially for the rest of her life.
“The impoverishment and the desperation of this worthy woman’s life highlights the real cost of affinity fraud,” Michael Otterson, managing director of the Church’s Public Affairs Department, told attendees at a conference hosted by Fraud College on Wednesday. “It targets the vulnerable. It takes the widow’s mite.”
At the half-day, February 15 fraud conference, Brother Otterson, along with Utah governor Gary Herbert, condemned affinity fraud—“crimes that by their very nature target those who are trusting, elderly, and defenseless,“ Brother Otterson said.
Brother Otterson cited a study that showed that religious Americans are more trusting of almost anyone than the average person.
“The Church of Jesus Christ of Latter-day Saints recognizes the significance of this problem and is deeply concerned about the harm it can cause,” he said. “As the threat of affinity and other fraud has surfaced in recent years, the Church has increased its efforts to teach its members and to encourage them to live by sound financial principles, as well as to avoid the dangers of financial predators.”
Senior Church leaders have repeatedly warned against fraud:
A 2008 letter from the First Presidency to wards in the United States and Canada warned against “those who use relationships of trust to promote risky or even fraudulent investment and business schemes” and suggested that investors first “seek advice from a qualified and licensed financial advisor.”
More than two decades before that letter was written, Elder M. Russell Ballard of the Quorum of the Twelve Apostles said, “There are no shortcuts to financial security. Do not trust your money to others without a thorough evaluation of any proposed investment. Our people have lost far too much money by trusting their assets to others. In my judgment, we will never have balance in our lives unless our finances are securely under control” (“Keeping Life’s Demands in Balance,” Ensign, May 1987, 13).
Brother Otterson reiterated advice from Church leaders that members should “be wise” in their financial dealings, cultivate a healthy skepticism of investment opportunities, and consult with qualified individuals to understand the risk involved.
“There is a difference between trust and naiveté, and Church members must be informed and cautious,” Brother Otterson said.
Church leaders in units around the world have frequently been encouraged to reinforce this message on a local level. In addition, the Brethren have warned that those who carry out these scams can expect to face Church discipline as well as criminal prosecution.
Brother Otterson ended by reminding those present that the existence of fraud should not decrease our faith in mankind or our commitments to our religious communities.
“We can in fact maintain the strength and the unity of all of our communities while developing extra sensitivity and caution,” he concluded. “Our trust in each other should be earned and verified, and in matters of finance, we should exercise special care. This kind of vigilance leaves religion able to bring all of its good fruits to our society and protects us from those who would abuse our virtues for their gain.”