“Affinity Fraud” occurs when a stock broker or financial adviser gains the trust of the customer by using his status as a member of a group with which the customer is also affiliated.  The NASAA (North American Securities Administrators Association) has identified “affinity fraud” as a serious threat to investors. During her March 29, 2006 testimony before the Senate, NASAA President, Patricia Struck outlined several cases of senior investment fraud handled by NASAA members, including one case in which a trusted church official operated a Ponzi scheme that victimized a total of 117 friends, relatives and parishioners (mostly seniors) of over $6 million.  Affinity Fraud often arises in a church setting or a community group.  Two of the fraud victims committed suicide from being so financially devastated by the fraud, testified Struck.  The case resulted in a conviction and a 10-year prison sentence.  Struck said the case is illustrative of the dangers seniors face today as they seek to maximize their retirement investments amid declining traditional defined benefit pension plans and rising life expectancies. There are a number of factors that make senior investors the primary victims of affinity fraud.  Older consumers are less mobile than their younger counterparts.  Isolated from family or friends, older consumers lose the advantage of getting feedback and advice with respect to the consumer transactions in which they engage.  After the death of a spouse, a senior may become lonely and more susceptible to the sales tactics of friendly salespeople who provide attention and seeming friendship.   Grief and loneliness can cause an older person to long for human contact and can diminish the consumer’s good judgment. At present, Elder Fraud continues to thrive.  Senior citizens continue to be vulnerable for a number of reasons.  First, they tend to be more trusting.  They may also have a diminished memory or simply have less time and energy to pursue a legal claim.  Unfortunately, the victims may not even realize they have been defrauded. It is a challenging task to understand the complexities and nuances of certain annuities and insurance products.  This is true even for sophisticated and experienced investors.  It is doubly challenging in the case of elderly investors.  In this regard, senior citizens are particularly vulnerable to broker misconduct, as they are frequently swindled into complex and inappropriate investments which they do not understand. Common problem areas include variable annuities and IRA losses. In addition, most state securities departments provide information that is helpful to seniors.  For instance, Texas provides a list of 10 tips on how seniors can protect themselves against securities fraud: http://www.texasinvestored.org/10tips.php