"Blessing Loom” or "Scammers Circle”?
- Thurgood Marshall
- Apr 21, 2020
- 2 min read
Pyramid schemes are making a huge comeback amid Coronavirus Pandemic. The old scam goes by many names “Blessing Loom”, “Gifting Circle” or “Wisdom Circle” but they all have the same goal in mind. The game involves people recruiting new members to pay an entry fee (usually $100) to join a chart. The founding member (The one slotted in the middle of the chart) then pockets those fees and bails. Then the new members of that chart are responsible for finding fresh recruits to continue paying entry fees. While many do end up leaving with their “investment” the scheme eventually falls apart when members on the outer circle can't find people to join. These “late-joiners” essentially lose their money
Games like this fall underneath the umbrella of Pyramid or Ponzi schemes which are defined as "[A] form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors." and are illegal. There have been several cases in the state of Utah but the resurfacing of these “Blessing Looms” has highly infiltrated social media networks such as Instagram, Facebook, and Snapchat with a lot on young users taking the bait.
Chris Petersen, a University of Utah law professor and former federal Consumer Financial Protection Bureau wants state and federal officials to work aggressively to shut down ‘Blessing Looms’, especially during the pandemic when consumers may be more desperate than ever to make a quick buck. These games play on vulnerability and should be taken seriously. STAY SAFE AND DON'T FALL FOR THE TRAP!
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