Gifting Club Scam
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Jamie Hall, writing in the Edmonton Journal, talks about a gifting club scam currently making the rounds in Alberta.
"Women in central Alberta involved in so-called gifting clubs may be unwitting participants in a pyramid scheme, the RCMP warns.
"It's one of the most popular I've seen in a long time," said Const. James Moore of the RCMP's K Division commercial crime section.
Police became aware of it a couple of months ago following an anonymous tip to Crime Stoppers, but believe it has been operating as long as two years.
It involves large numbers of women throughout the province in Sherwood Park, Edmonton, Gibbons, Stony Plain, Grande Prairie, Morinville, Fort Saskatchewan and Cold Lake.
One of the schemes has expanded to include at least 525 people."
Here is some of the pitch from one website;
"If you wish to hear true rags to riches stories, then let me start by introducing you to an outstanding winning activity that starts with the basic idea of giving.
Groups of individuals have grasped this child's bible concept and turned the dream of making money into a reality."
Of course this is just the simplest pyramid scheme in which the transfers are dressed up as "gifts".
But the language is particularly evocative - who can argue with "the basic idea of giving"?
Here is how the final pitch ends.
"Ask yourself this question, what does your heart say?
The very act of giving and receiving is an exciting principle.
This has been so profitable for me and my family and has made many of my fellow gifters very wealthy.
This Cash Gift opportunity can do it for you too!"
I remember talking with a young business woman about this type of opportunity several years ago.
She was falling for the naive induction scheme: some of her friends had "invested"$5,000 and got back $25,000. She wondered how this could be possible, and if it was true shouldn't she be involved in it?
I pointed out to her that if she worked the scheme to her advantage then necessarily some of her friends would be out money. I think that she tried it anyways.
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