We've been noting many areas of fraud that have experienced an uptick since the COVID-19 pandemic started, and investment-related fraud has been high on the list. Social media has been a breeding ground for several investment promotions – with the most recent being "blessing loom" investment programs.
Blessing loom programs have recently appeared under a variety of names, including "Sou Sou," "The Circle Game," "Money Board" and "Infinity Loom." Last month, the Federal Trade Commission (FTC) and the state of Arkansas sued the operators of another blessing loom program called Blessings in No Time (BINT), alleging that the investment program they offered is actually an illegal pyramid scheme. The complaint charges that the operators of BINT caused the loss of millions of dollars from thousands of customers.
BINT promised people who joined the program that they would realize investment returns as high as 800%. The minimum investment was $1,400 and some victims paid in as much as $62,700. Invitations to join often came through Instagram, Facebook and messaging apps.
BINT has an F rating with the BBB in Dallas, Texas. These are excerpts from complaints BBB received from all over the U.S.:
"I invested $1,425 to receive a return of $11,200. I never received anything."
"I brought five people into this community and not a single one of my people was blessed."
"They are taking people's money and using it to build their own lavish lifestyle."
"I took my pension and placed it in a community that advised from the start they GUARANTEED MONEY BACK AT ANYTIME."
These scams aren't limited to the blessing loom approach. During the holidays the "Secret Sister" promotion pops up, which encourages you to share "gifts" with others and earn several for yourself.
No matter the name, the basic premise of these offerings is the same - if you invest money in the program, you'll get a huge return and bring good fortune to others you recruit. Unfortunately these are illegal pyramid schemes that have no real product or investment. Once the supply of new recruits runs out, the scheme collapses and most participants lose their investment.
Here's how the scam typically works:
A direct message arrives though social media or a messaging app by a friend, family member, or possibly a stranger. They invite you to join a "Blessing Loom" or similar opportunity, stating that it's a great way to earn money while also "blessing others."
They claim that with a small investment of about $100 paid through PayPal, Venmo, or another digital payment service, you can spread the wealth and see a huge return on the money you put in. You simply need to recruit a few others to invest. As they recruit others, the circle will widen and everyone will make loads of cash.
Your family and friends likely truly believe that they are recruiting you to an ideal opportunity, but unfortunately these schemes are not only illegal, but as outlined in the case with BINT, they leave lots of people disappointed and with less cash than when they started. Your personal information may also be compromised.
The FTC and your BBB offer these tips to avoid becoming a victim of a social media investment scheme, whatever name it goes by:
If making money depends solely on recruiting other participants, it's a scam.
Be skeptical of any investment opportunity that guarantees high returns.
Don't assume an opportunity is legitimate because you learn about it from a friend on social media. The "friend" might even be an impostor.
Check out the promoter with the BBB and online, using "complaints" or "reviews" in the search, to see if others have reported having a bad experience.
To learn more about pyramid scams, how they work, and how to spot them, please visit bbb.org. If you've been the victim of a scam, please report your experience to BBB Scam Tracker at bbb.org/scamtracker. Your report can help others to stay informed and protected.
Michele Mason is president and CEO of the BBB serving Southeast Tennessee and Northwest Georgia.