Beware of pyramid scheme that cost Vancouver woman $7,500: Better Business Bureau
A Vancouver woman lost thousands of dollars after being lured into what the BBB calls a “pay it forward” #scam.
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The Better Business Bureau is warning the public to watch out for online pyramid schemes after a Vancouver woman was bilked out of thousands of dollars.
The victim, whose name hasn’t been released, was lured into what the BBB calls a “pay it forward” scam after a friend recommended it to her on Facebook. She was told that by paying a $5,000 “gift” and recruiting two more people to take part, she would be rewarded with $40,000.
She was also told that paying $2,500 and recruiting one additional person would bring her $20,000.
The massive cash payouts never came, of course, and the woman unfortunately ended up losing a total of $7,500.
The BBB’s Karla Davis said people should be extra cautious about such schemes, particularly heading into the holiday season when a number of similar yuletide-themed scams make the rounds.
“A pay it forward scheme, secret sister campaign, secret Santa or holiday gift exchange among strangers might seem like innocent fun, but it is really a pyramid scheme and this is illegal in Canada,” the BBB’s Karla Davis said in a news release.
“Just like any other pyramid scheme, they rely on the recruitment of individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply stops as well, and leaves hundreds of people disappointed without the money they hoped for.”
The victim in this instance was told her “gift” had to be paid in cash, and that she was not to speak about the exchange to anyone. All communication was done through an encrypted text messaging app called Telegram, where participants used code names to speak to each other.
The BBB said beyond losing money, victims can also have their personal information, such as their mailing address and email, compromised when signing up.
Anyone who is approached with an offer of gifts or cash by mail, email or social media should ignore it, the BBB said. People are also encouraged to report suspected pyramid schemes as they find them.
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