Watch Out for ‘Gifting’ Schemes
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My sis and I had lunch yesterday and she had a story to tell that put a real frown on my face.
A friend she used to work with had showed up on her doorstep out of the blue and after an enjoyable cup of coffee, she pulled a folder out of her bag and said she had something she wanted to share.
Rory (not her real name) said she had been invited to this awesome women’s group meeting by a coworker where she was introduced to this amazing program where women support each other and have the opportunity to make amazing amounts of money.
To make a long story short – Rory joined this group by making a $5000 cash gift to one of the women in the group Now, it was her mission to reach out and get all of her friends and family to do the same – because the women she met were all making a ton of money. (Why one lady has made $105,000.00 so far!)
Can you say ‘Cash Gifting Program’?
How about ‘Illegal Pyramid Scheme’?
Or ‘Ponzi Scheme’?
The paper work was filled with all kinds of interesting verbiage like ‘We are careful to only use language like ‘gifts‘ and ‘women supporting other women‘ so that this won’t be misunderstood to be a business.’
The paper work also says that all correspondence is sent by private messenger server and never by the United States Postal Service to avoid breaking any laws.
At the meeting they are told this is ‘only for women’ and that they shouldn’t even discuss this with their husbands.
These huge red flags stood out to my sister and I’m thankful that she wasn’t taken in by it even a tiny bit.
What shocks me is that Rory fell for it. I know her. She’s no bonehead. Why didn’t she pick up on all the signs that she was being pulled into something bad? All I can think of is that she got caught up in the excitement at a meeting.
But still – she borrowed cash from her retirement fund to do it so it wasn’t entirely impulsive. She went in with her eyes open – knowing she’d have to go on to talk other women into doing the same thing if she were to have any chance to profit.
I have a VERY negative opinion of these programs. Sure, a few people who get in early make great money – but does that make it ok? Of course it doesn’t. Pyramid schemes always collapse and leave a whole lot of people at the bottom holding nothing but broken dreams. I’ve seen it happen to my friends and I’ve heard so many stories from moms that it breaks my heart.
Don’t be fooled by feel good stories and never believe anyone when they tell you that ‘this is designed to go on forever!’. It’s all bunk. The people trying to sell you on the ‘opportunity’ are only telling you about it because they NEED YOU to fall into the same hole they did in order to make their payout level.
I don’t care if she’s your co-worker, your neighbor, your church friend or your sister – don’t fall for it!
If you would like to learn more about gifting programs, visit this site.
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Leslie Truex is the pajama-clad work-at-home mom dedicated to helping other moms live and work comfortably. She's the author of The Work-At-Home Success Bible and owner of 
Laurie Ayers is a WAHM from Michigan and a Star Director with 
I’m so flabbergasted that people fall for this — of course it’s because they are getting involved based on hope. But this is obviously an illegal ponzi scheme (and the organizers know it, that’s why they are trying to avoid mail fraud laws).
I had a friend/client who took out his life savings and a loan (!!) to invest in a “guaranteed” risk-free 10% return a month. Course, if he had asked me I would have said no way anyone can guarantee 10% risk-free return a month. A month or two later it was shut down by the Feds, he lost all of his money, and he had to declare bankruptcy.
Here’s a rule of thumb — if you are afraid to tell your spouse, parents, business coach, or financial advisor — don’t do it.
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What amazes me more is how often I see people defend these programs on forums. They’ll insist that they’re legit, even if someone points them right to the page on the FTC website that talks about gifting, or gets into IRS codes on it… they always have some excuse why it doesn’t apply to them.
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I left a comment on your other blog Kelly but the thought popped into my head and I felt I had to say it.
I have a hard time feeling as sorry for people who fall for these schemes as you seem to.
Because they appeal to greed -money for nothing- it’s akin to gambling. I don’t feel sorry for people who are “addicted” to gambling because they don’t have to ever gamble in the first place and you can’t get addicted to an activity you don’t engage in!
Anyone who falls for one of these schemes has an underlying problem in my opinion, so the $5,000 is a painful lesson.
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I understand Carrie. But I really do think there are innocents out there who get hurt.
When your sister or best friend or boss tells you that it’s legal, ethical and totally cool – some people just take it at face value and fall right in.
You tell very good stories. Im sorry those things happened..i too fell victim to an opportunity a long time ago. it doesnt feel good at all. however, i am seeing that the ones who have the law on their side by not doing cash gifting illegally have helped a lot of people. they tend to not do cash gifting as a business because if it were they would be recieving funds that must be taxed. so in any case, if the FTC were to defy the odds and actually look into a “cash gifting case”, they would send the person a slip giving him x-amount of days to provide some kind of receipt(s) for his gifts because they would be wanting to get their money in taxes. TRUST me, there not throwing anybody in jail until they get their peice of the pie, so to speak. dont enter into these programs looking to “profit”, you are only offering services to people for the expectation of NOTHING in return. it is ultimately 100% the person’s own decision to gift you money AFTER they have received your services. absoltulely legal and has nothing to do with “gifting laws”.