Social media investment scams seek to take advantage of Black Americans hurt by COVID-19 | Opinion - Commercial Appeal

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The mechanics vary slightly, but the basic premise of these scams is that if you invest money in the program, you'll get a lot more back while also bringing good fortune to others you recruit.

Randy Hutchinson  |  Columnist

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• Randy Hutchinson is the president of the Better Business Bureau of the Mid-South. Reach the BBB at 800-222-8754.

The FTC issued an alert in May 2020 about a chain letter scam called a "blessing loom." Our national office sent out a similar warning. I read both alerts, couldn't quite understand how the scam worked, and decided it sounded so silly that it wasn't worth writing a column about. 

I've had to rethink that decision now that the FTC and the state of Arkansas have sued the operators of a blessing loom investment program they allege has bilked thousands of consumers out of tens of millions of dollars.

The FTC says it's nothing more than a pyramid scheme and that it targets African Americans struggling financially during the COVID-19 pandemic.

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Social media investment scams go by various names besides blessing loom, including "The Circle Game," "Money Board" and "Infinity Loom." The mechanics vary slightly, but the basic premise of these scams is that if you invest money in the program, you'll get a lot more back while also bringing good fortune to others you recruit.

In fact, as in other pyramid schemes, there's no real product or investment and once the supply of new recruits runs out, the scheme collapses and most participants lose their investment.

Texas-based Blessings in No Time (BINT) promises people who join the program that they'll realize investment returns as high as 800%. The minimum investment is $1,400 and some victims have paid in as much as $62,700. Invitations to join often come through Instagram, Facebook and messaging apps. 

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It's hard to explain the intricacies of BINT's program and even an illustration in the FTC's press release doesn't help much. Basically, there are different levels of participation called Fire, Wind, Earth and Water and an investor's goal is to recruit enough new participants to reach a level where the investor is "blessed out," meaning the promised payout is received. 

BINT assures participants they won't lose money and can withdraw their money at any time and get a full refund. But for every person who receives a payout, many more lose money.

BINT has an F rating with the BBB in Dallas, Texas. These are excerpts from complaints they received:

• "I invested $1,425.00 to receive a return of $11,200. I never received anything."
• "… they made me believe that what they had going…was a community of African American people that was trying to help each other."
• "I brought five people into this community and not a single one of my people was blessed."
• "They are taking people's money and using it to build their own lavish lifestyle."
• "I took my pension and placed it in a community that advised from the start they GUARANTEED MONEY BACK AT ANYTIME."

The FTC and BBB offer these tips to avoid becoming a victim of a social media investment scheme, whatever name it goes by:

• If making money depends solely on recruiting other participants, it's a scam.
• Be skeptical of any investment opportunity that guarantees high returns.
• Don't assume an opportunity is legitimate because you learn about it from a friend on social media. The "friend" may be a victim or even an impostor.
• Check out the promoter with the BBB and online, using "complaints" or "reviews" in the search, to see if others have reported having a bad experience.

Randy Hutchinson is the president of the Better Business Bureau of the Mid-South. Reach the BBB at 800-222-8754.

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