What are blessing circles?

And until you recruit more people, you don't move closer into the “blessing circle,” which gets you closer to the center to get paid the money promised. “And then the people at the top will profit from it, leaving the people at the bottom out of their money,” Carr said. Pandemic puts new twist on old “blessing” scam.

How does a blessing circle work?

Everyone gets a turn and it is an informal way of saving money. The total contribution is eventually given to everyone and everyone gets their turn; there is no profit. “With a 'blessing circle', it is not even circular, it is a pyramid. 'Blessing circle' is just a fancy name for a pyramid scheme.

Do gifting circles work?

True gifting circles are good. They help people save money and waste fewer resources. They exist in many cultures and communities and help build relationships within those circles.

Are gifting circles illegal in the United States?

Fact: Gifting clubs are criminal enterprises. Organizers are guilty of a felony, and participants are guilty of a misdemeanor. Claim: According to the IRS this is legitimate, because the law allows you to give someone up to $13,000 each year without a tax consequence. Fact: Gifting clubs are not approved by the IRS.

Is the blessing loom legit?

Nope, it's a social media pyramid scheme. By Better Business Bureau. June 21, 2021. UPDATE, June 2021: The FTC and the state of Arkansas sued the operators of a "blessing loom" investment program, alleging that it is an illegal pyramid scheme.

Blessing Loom Explained

Can you go to jail for Blessing Loom?

A "Blessing Loom" may sound like a highly beneficial program or even a sacred object. But it's nothing of the sort. It's a pyramid scheme and a scam that could draw you into an illegal involvement, which could, in turn, land you in jail.

Is a susu a pyramid scheme?

Susu scams

In contrast to traditional susus (in which participants only receive the money they put in without profit), these schemes promise a profit. Additionally, these scheme promise rewards for recruiting more people to the susu, in effect making it a pyramid scheme.

Is blessing circle illegal?

It's a promised return better than the stock market, but law enforcement officials warn it's also illegal. Blessing looms, or “gifting circles” as they are referred to, are illegal, according to law enforcement.

Is cash Gifting Illegal?

Cash gifting is when someone gives you a sum of money as a gift rather than in exchange for goods or services. For example, your parents may give you money for a holiday or graduation present. However, it can also be an illegal pyramid scheme that can cost you money and potentially land you in jail.

What is a money circle?

WHAT IS A MONEY CIRCLE? A person's “money circle” includes those family members, significant others, friends, and others who affect a person's financial life. Each individual's money circle is unique because it is based on the specific family and social relationships that impact their money decisions.

How do you start a gifting circle?

How can you tell if someone is in a pyramid scheme?

Start posting this clip and then ask them questions like: “Have you ever been to Egypt?” or saying things like “Wow, I would love to go see the pyramids one day.” This should tip them off that they're probably engaging in some sort of pyramid scheme.

How does the Blessing Loom start?

The scam, which is commonly known as "Blessing Loom," involves people recruiting new members to pay an entry fee to join some sort of group. The founding member (or person who replaces them) then pockets those fees and bails, while the new members then have to find fresh recruits to continue paying entry fees.

What is a commitment Circle?

To encourage others to join them in our life changing mission, the Morning Light Board created The Commitment Circle. This giving society acknowledges individuals who annually contribute a minimum of $1,000.

How do pyramid schemes make money?

A pyramid scheme is a fraudulent system of making money based on recruiting an ever-increasing number of "investors." The initial promoters recruit investors, who in turn recruit more investors, and so on. The scheme is called a "pyramid" because at each level, the number of investors increases.

What is the IRS limit on gifting money?

For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000. For 2022, the annual exclusion is $16,000.

How much money can you gift someone without paying taxes?

The first tax-free giving method is the annual gift tax exclusion. In 2021, the exclusion limit is $15,000 per recipient, and it rises to $16,000 in 2022. You can give up to $15,000 worth of money and property to any individual during the year without any estate or gift tax consequences.

How does a gifting table work?

The way it worked was this: "tables" of women (The Gifting Tables' membership was exclusively female) were built in a pyramid structure of eight members with one at the top, two in the second row, three in the third row, and four on the bottom. The top member would recruit others to join her table, for a fee of $5,000.

Does a sou sou work?

The members do not earn interest and there is no reward for recruiting participants. Although there are legitimate sou-sous, there are also scams parading as sou-sous that are illegal pyramid schemes.

What is the most famous pyramid scheme?

Are gifting tables illegal?

The latest true crime series Murder on Middle Beach just hit HBO. The documentary follows the murder of a Connecticut woman, Barbara Hamburg. Barbara was said to be involved in "gifting tables," an illegal pyramid scheme that some think could have played a role in her death.

How does a weekly Sou Sou work?

A sou-sou is a group of people who come together and make regular weekly, biweekly or monthly monetary contributions to a common fund, which is then disbursed as a lump sum to one member in each cycle. For example, say 10 people join, and each puts in $100 a week.

How do I start a susu?

Is susu money taxable?

The leader was eventually sentenced to 48 months in federal prison, the Hartford Courant reported. Although not commenting directly about the sou-sou or gifting circles, IRS spokesman Eric Smith said that under federal tax law, all income is taxable unless specifically exempted.