Beware online pyramid schemes

The Better Business Bureau is urging the public to steer clear of secret sister gift exchanges, pay-it-forward schemes and gifting circles following a report from a consumer in Vancouver who lost $7,500.

The victim was lured into a pay-it-forward scam that was recommended to her by a friend on Facebook. In order to get involved, she was instructed to pay $5,000 and recruit two new people to join the scheme.

article continues below

She was told that, one day, she would receive $40,000. She also had the option to pay $2,500, recruit one new person and eventually receive $20,000.

The fraudsters tricked the victim into believing the payment was a legal, non-taxable gift that must only be paid in cash. All payouts or “gifts” were to be collected in cash and could not be deposited into a bank account.

Those involved in the scheme were not allowed to share details with anyone or post about it online and all communication was done through Telegram, an encrypted text-messaging app where members used code names.

“A pay-it-forward scheme, secret sister campaign, secret Santa or holiday gift exchange among strangers might seem like innocent fun, but it is really a pyramid scheme and this is illegal in Canada," said Karla Davis, of the Better Business Bureau.

“Just like any other pyramid scheme, they rely on the recruitment of individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply stops as well and leaves hundreds of disappointed people without the money they hoped for and the gifts they were promised.”

Report scams online at bbb.org/scamtracker.

© Kamloops This Week

 


KTW Daily News Alerts
KAMLOOPS WEATHER

Question of the Week POLL

Alberta, Nova Scotia, Ontario and Quebec have made masks mandatory for staff and students in school. Should B.C. follow suit when kids return in the fall?

or  view results

Popular Kamloops This Week

Events Calendar

Help Us Help Kamloops. Support Local Media.

In response to the COVID-19 crisis, Kamloops This Week is now soliciting donations from readers. This program is designed to support our local journalism in a time where our advertisers are unable to due to their own economic constraints. Kamloops This Week has always been a free product and will continue to be free. This is a means for those who can afford to support local media to help ensure those who can’t afford to can get access to trusted local information. You can make a one-time or a monthly donation of any amount and cancel at any time .

NEW: For every donation of $25 or greater, we will offer a digital advertising package to the local non-profit group of your choice.

Click on https://support.kamloopsthisweek.com for more information or to make your donation.

Thank you in advance for your support.