Why has affinity fraud taken root within the LDS community? Two primary causes come to mind:
(1). Instant acceptance. In most parts of Utah, once you move into a neighborhood, identify yourself as LDS, and attend services, you gain instant acceptance. Most LDS members cannot conceive that someone who's made temple covenants might be out to scam them.
(2). Get rich quick. Much affinity fraud is tied to "get-rich-quick" schemes. The temptation to latch onto a scheme promising 30 to 40 percent profit with only nominal risk is irresistible to many.
Contrary to the propaganda put out by anti-Mormons, the Church of Jesus Christ of Latter-day Saints is cognizant of this problem and takes a dim view of those of its members who engage in affinity fraud. Members who are guilty of carrying out these scams can be given the most serious discipline the Church can impose, including excommunication. Church authorities have repeatedly warned members about this problem; in February 2008, the Church issued this statement:
Reports of fraud schemes and unwise investments prompt us to again counsel members with respect to prudence in managing one’s financial affairs.
We are concerned that some Church members ignore the oft-repeated direction to prepare and live within a budget, avoid consumer debt, and to save against a time of need. Consideration should also be given to investing wisely with responsible and established financial institutions. We are also concerned that there are those who use relationships of trust to promote risky or even fraudulent investment and business schemes.
While all investments carry an element of risk, that risk can be managed by following sound and proven financial principles: first, avoid unnecessary debt, especially consumer debt; second, before investing, seek advice from a qualified and licensed financial advisor; and third, be wise.
We encourage leaders to regularly teach and reemphasize these principles.
But while the LDS Church can counsel, it cannot compel. It is up to individual members to exercise caution and restrain their own avarice. The problem is with the members rather than with the institution.