TYLER, Texas — Have you been asked to participate in a “Blessing Loom,” or jump on a “Money Board”?
These are just some of the names for an online scam that’s making and targeting those who are unemployed or low on funds.
"You’re virtually guaranteed to lose your money, or pull in friends and family who will lose theirs," Seena Gressin, Attorney for the Federal Trade Commission's (FTC) Division of Consumer & Business Education said.
According to the Panola County Sheriff's Office (PCSO), the scam is known by many different names such as:
- Blessing Loom
- Blessing Bank
- Infinity Loom
- Snowflake Blessing
- Giving Circle
- Blessing Circle
"The scam is a chain letter-type of pyramid scheme," the PCSO said in a statement. "While versions vary slightly, the one we’re hearing about most promises that you’ll collect $800 for an investment of $100 and, at the same time, help bring good fortune to someone else by recruiting them to join."
How the Scam Works
According to the PCSO, you see a post or get a direct message on Instagram, Facebook, or other social media. It invites you to join the Circle or Loom by sending $100 through PayPal or another digital payment service to the person whose name is at the center of an octagon-shaped playing board. Your payment gets you one of eight spots on the outer ring of the board and a chance to move towards the center by recruiting other people to join. As more people join, your board changes and the number of playing boards expands. Eventually, you’re supposed to land at the center of a playing board and collect $100 from each of eight new recruits on the outer ring. That’s when you leave the game or start all over again with another $100 payment.
"What’s the harm?," said the PCSO in a statement. "Like other types of pyramid schemes, these chain letters depend on recruiting new people to keep money flowing into the enterprise. There are no products sold or real investments creating profits. Once players run out of new recruits to bring into the game, the money dries up and everyone waiting to reach the center comes up empty handed."
When the scheme first surfaced in 2016, a financial advisor told our Midland station not only is it very rare you'll see your money again but it's also illegal.
"The odds of actually getting the benefit of the $800 dollars are very low," said Mickey Cargile, President of Cargile Investment Management.
"It's a violation of the postal code, it's a violation of the United States code," said Cargile. "Also there are banking regulations and tax ramifications for not reporting any money that you're getting from this."
Texas law states those participating in pyramid schemes can face up to two years in prison and/or a fine up to $10,000:
TBCC 17.461 “Pyramid promotional scheme” means a plan or operation by which a person gives consideration for the opportunity to receive compensation that is derived primarily from a person's introduction of other persons to participate in the plan or operation rather than from the sale of a product by a person introduced into the plan or operation.
The Texas State Attorney’s Office has been informed of the actions of those involved in this offense, according to the Kilgore Police Department. If you are involved, by any means, in the offense, it is recommended that you cease and desist immediately.
If you get an offer to join an online game like this, it’s a scam. If you’ve paid someone to join this game, alert the FTC at: ftc.gov/complaint. Your report can help protect others from a scam.