BBB outlines new twist on pyramid schemes

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Do you have a friend or family member who wants to "let you in on the ground floor" of a fantastic business opportunity?|ret||ret||tab|

Think twice if that opportunity involves making an initial "gift."|ret||ret||tab|

The Better Business Bureau reports that pyramid schemes are resurfacing with a new twist. The latest versions are called gifting, or giving, clubs.|ret||ret||tab|

To join the club, consumers are asked to make a contribution to the highest ranking members, who have titles such as captain or chairperson.|ret||ret||tab|

Gifting club promoters usually target closely knit social and religious organizations, encouraging participants to bring in friends and relatives to help them assume a higher position in the ranks. In reality, the clubs are nothing more than illegal pyramid schemes.|ret||ret||tab|

The problem is, like most pyramid schemes, illegal gifting clubs must continually recruit ever-increasing numbers of members to survive. When the supply of people runs out, the pyramid collapses, and most people at the bottom of the pyramid lose their money.|ret||ret||tab|

If you're approached about joining a club but you are not sure if it is an illegal gifting club, the Better Business Bureau and Federal Trade Commission recommend that you:|ret||ret||tab|

Consider that a legitimate gift has no strings attached and is not an "investment."|ret||ret||tab|

Avoid being misled into thinking a gifting club is legitimate because the ads say that members consider their payments a gift and expect nothing in return. This is an attempt to make an illegal transaction look legal.|ret||ret||tab|

Be wary of success stories or testimonials of tremendous payoffs. Very few members of gifting clubs or pyramid schemes ever receive any money.|ret||ret||tab|

Take your time. Don't buckle under to a high-pressure sales pitch that requires you to join immediately or risk losing out on the opportunity.|ret||ret||tab|

For more information on pyramid schemes, visit the Better Business Bureau's Web site at |ret||ret||tab|

|bold_on|www.bbb.org/library/tippyra.asp.|ret||ret||tab|

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