From financial improprieties to fraudulent claims, scandals and trust transgressions can incite feelings of betrayal. Can these negative reactions spillover and taint other entities that were not involved in the original transgression? We conducted six studies to investigate this question directly. Results consistently demonstrated that people who had perceived a recent betrayal by a transgressing trustee were significantly less likely to trust a new entity that shared nominal group membership with the previous trust transgressor. This betrayal spillover effect occurs both in economic game environments and can be applied to real-world charitable contexts in which people made actual donation decisions or assessed the likelihood that a charity would be embroiled in a scandal in the future. Importantly, the betrayal spillover effect only spilled over to those that shared a nominal group identity with the original trust transgressor, and this behavior was driven by a sense of distrust stemming from people’s expectations having been violated. By systematically investigating whether and to what extent betrayals can contaminate subsequent trust development, this research provides a deeper and broadened understanding on how one may be vicariously affected by other entities’ trust indiscretions.