…the people who have paid money into a scheme are desperately recruiting others in hopes they can get their money back,” Hood added.
“These pyramid schemes always collapse, and I hate that some people in our state would risk losing their money, especially this close to Christmas.”
Red Flags
If you’re unfamiliar with pyramid schemes, Ponzi schemes and multi-level marketing (MLM), it can be easy to get caught up in a too-good-to-be-true offer, especially during the holidays when money is tight and people are more vulnerable.
In addition to ignoring offers that promise high profits, a press release from the State of Utah Department of Commerce also urges consumers to look for these signs common of Ponzi schemes and gifting pyramids:
- Promise a consumer that they will make money with very little effort or investment.
- Pitches include persuasive success stories of how many other people have made money from the same venture without providing concrete facts.
- Revenue is generated from bringing in new members or friends to buy into the program.
Sou-Sous & Cooperative Economics
Truth be told, many of the people going hard in favor of the Blessing Loom being legitimate are simply those that have bought into it already and want to get their $800 (or not lose their $100). However, there are many that don’t see a scheme at all and instead, say social media has put a modern spin on the traditional West African sou-sou.
Sou-sous are an informal savings club, where a group pools their monies and contribute on a regular basis to a common fund. After a specified period of time, each member will receive a lump sum payment from the pot. You reap what you sow; get back what you put in.
For example, a sou-sou of 10 people putting in $100 a month would…