The Blessing Loom -- which is also referred to as a Christmas Wheel, Snowflake Blessing, or Infinity Loom, among other names -- is a promotion that consumers should steer clear of. The U.S. postal service calls these online gifting schemes “high-tech chain letters,” while the FTC lumps them into the ‘Ponzi’ scheme category.
Red flags
A gifting pyramid or Ponzi scheme will typically:
- Promise a consumer that they will make money with very little effort or investment. Some looms may cost as little as $10 to join.
- Include a pitch with stories of how many other people have made money from the same venture without providing concrete facts.
- State that revenue is generated from bringing in new members or friends to buy into the program. While some complicated schemes might provide commissions to members, Jobs & Hire reports that most do not receive the amount they were initially promised. In fact, some lose everything they paid.
Consequences
Monetary loss isn't the only potential pitfall of investing in a pyramid scheme like the Blessing Loom. In some states, participation in an online gifting scheme could lead to jail time.
Mississippi law prohibits participation in pyramid schemes, Attorney General Hood pointed out. Violators could spend six months in jail and be forced to pay a $500 fine. In Alabama, violators face a fine of up to $2,000 for participating in a pyramid scheme.
Facebook also isn't likely to take kindly to one's participation in these scams. Per Facebook's terms of service, an individual's account may be terminated if they are caught participating in "unlawful multi-level marketing, such as a pyramid scheme."