An old scam with a twist: Experts warn of pyramid-type schemes
LAFAYETTE, La. (KLFY)- Experts are warning of types of pyramid schemes taking advantage of unsuspecting consumers during these uncertain times.
The scheme starts with a convincing invitation, either by email or social media to sign up for what seems like a great way to make fast money.
“This scam promises easy money quick, in times of need right now with the economy the way it is and unemployment being high, scammers are taking the opportunity to roll out this ‘Blessing Loom’ scheme,” Chris Babin, with the Better Business Bureau of Acadiana, said.
The “Blessing Loom” is a diagram showing names of participants.
The objective is to have your name at the center of the ‘loom’ to receive your ‘blessings’ or payment.
“This requires you to pay money up front to be part of this pyramid, to be part of this ‘blessing loom,’ and the more people that you recruit to also pay money up front, the more money that you get returned to you, and what they’re promising is you pay a little bit to be involved, you recruit a bunch of people, and you make a lot of money on it,” explained Babin.
This leaves disappointed people without their promised return of investment.
“Everything that people are paying to be involved is money that scammers are making away with,” Babin added. Experts say pyramid schemes are illegal in the U.S.
Here are some tips from the Better Business Bureau in order to not fall victim to this type of pyramid scam:
- If you receive an invitation to join a pyramid scheme on social media, report it.
- Make sure you never give your personal information to strangers. This will open the door to identity theft.
- Be wary of false claims. Some pyramid schemes try to win your confidence by claiming they’re legal and endorsed by the government.