SALT LAKE CITY – Gift scams are flooding Facebook feeds, and the latest one to surface online is called the "Blessing Loom."
Here’s how it works: Once you agree to play, you’re given a link to a chat in the messaging service WhatsApp.
A picture of a loom pops up, along with PayPal account info to send $100 to the person in the center of the circle. You earn a spot on the outside of the loom. You must then recruit others, who also pay $100. Once all of the spots on the loom are filled, it splits into another loom.
If everything works out, you find yourself at the center of a loom and are “blessed” with $800.
“That raises red flags for us,” said Daniel O'Bannon, Director of the Utah Division of Consumer Protection.
He says the game is nothing more than a pyramid or Ponzi scheme. If no one else buys into the Blessing Loom, members lose all their money.
“It's kind of a 'rob Peter to pay Paul' type scenario,” O'Bannon said.
With these scams surfacing on several social media sites, regulators worry people are getting a false sense of security.
“This isn't the same as sitting in a living room with trusted and known friends: You're in an electronic world where you don't know who's on the other side of whatever is going on,” O’Bannon said.
There are some warning signs you should look out for to avoid being sucked into a Pyramid or Ponzi Scheme:
- You are promised money with little effort or investment
- The promoter cites stories of others who have successfully capitalized with the same venture
- You must recruit new members in order to make money
“If something seems too good to be true, it probably is,” O’Bannon added.
If you feel like you were duped and would like to file a consumer complaint with the Utah Division of Consumer Protection, click here.