(NBC NEWS) – A new scam is slowly taking over social media. They’re known as “blessing looms” or “gifting circles.”
Participants are promised they will receive thousands of dollars with little effort and a small initial investment.
“Most people who get involved with it are going to end up losing money,” warns Kati Daffan of the Federal Trade Commission.
They are new versions of an old scam, the pyramid scheme, and any participation in them is illegal.
The scheme relies on people recruiting new people to keep the scam afloat.
“They are a little bit more personal than a lot of scams and in that regard also can be more hurtful,” warns Katherine Hutt of the Better Business Bureau.
The money sent in is moved electronically via apps, leaving participants with little recourse for recovery. “Once you hand that money over, it’s gone,” Hutt says.
Experts say you should do your research and if one of these “deals” pops up on your social media feed walk away, keeping those hard earned dollars in your wallet.