People are warned against the pyramid or Ponzi schemes proliferating on social media, particularly this holiday season. "Blessing Loom" and "Secret Sister Exchange Gifts" are two of the viral scams on Facebook these days.
The State of Utah Department of Commerce earlier released a warning, urging consumers not to fall for the "Blessing Loom" scam circulating on social media, particularly on Facebook. The scammers also pitch the Ponzi scheme through emails and texts. Most recently, Better Business Bureau, also released a consumer warning against another Facebook scam called "Secret Sister Gift Exchange" that takes advantage of the season of goodwill, ABC News reported.
So how do these online hoaxes work? "Blessing Loom" asks a Facebook user, for instance, to deposit $100 to a PayPal or WhatsApp account. They should recruit two friends to get an $800 return of their investment. So the bigger the money you put it, the bigger the payout you'll receive. However, if you fail to recruit the required number of people, you don't get anything in return.
"Blessing Loom" also goes with different names, all works the same, including Christmas Loom, Christmas Pay It Forward Loom, Christmas Wheel, and Christmas Blessing Loom.
On one hand, "Secret Sister Gift Exchange" asks people to purchase a $10 gift for a stranger and then invite friends to join in. In return, the sender of that gift will receive 36 gifts from other people who participated in the "gift giving" program.
BBB warned not to buy in this scheme, which comes with disclosing your personal information and home address. Who knows how the people behind this would use such delicate information. In addition, BBB also clarified that because this pyramid scheme is illegal, participants could be fined for mail fraud.
These schemes look attractive these days because people want to make more money for the holidays or share blessings to others, including strangers. However, there are people taking advantage of these. Bottom line is, when it sounds too good to be true, it most likely is, and authorities are urging people to just totally ignore it.
