“The Blessing Loom” is back for a summer rerun. On Monday, the Federal Trade Commission (FTC) and the state of Arkansas sued the operators of a “blessing loom” investment program -- a pyramid scheme-like scam that pitches an enormous return on investment to unwitting victims.
The scheme involved operators convincing consumers to pay $1,400 to join their program, with the promise that the investment could lead to a potential 800% return if they could get other people to join.
However, some victims of the scheme ended up paying over $62,000 to participate, and all of their money was allegedly used by the organizers when no more members were willing to join. In total, the FTC said the operators of “Blessings in No Time” (BINT) defrauded thousands of victims out of tens of millions of dollars.
The couple was charged with violating the FTC Act, the Consumer Review Fairness Act, and Arkansas state consumer protection laws.
Targeting vulnerable consumers
The agency accused BINT of taking advantage of many consumers early on in the pandemic when they were financially vulnerable.
“The COVID-19 pandemic attacked Americans’ health and their wallets,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “These scammers, who specifically targeted Black communities, used false promises of wealth to deceive consumers out of money at a time that Americans could least afford to lose it.”
To help convince more skeptical victims, the FTC’s complaint alleges that the defendants assured participants that they wouldn’t lose a single dime and that they could withdraw at any time and receive a full refund for everything they invested.
Just to be sure the scheme had a chance of remaining out of sight of authorities, the FTC said the defendants asked participants not to use certain payment processors or apps due to those processors having previously flagged BINT transactions. The complaint also alleges that the defendants illegally prohibited participants from posting anything about BINT on social media or the internet.
The FTC’s complaint seeks to permanently enjoin BINT’s illegal operation and provide compensation for victims who were bilked out of their money. Officials are also asking for civil penalties to be levied against the defendants under Arkansas state law.