Nov 27, 2016 05:22 AM EST

Latest Facebook Scam Gives You $800 In Exchange For $100: 'Blessing Loom' A Big Ponzi Scheme?

By JC Santos

Facebook users are promised an $800 payout if they can refer two other people into the "Blessing Loom" and deposit at least $100. Showing signs of a classic Ponzi scheme, authorities and observers warn Facebook users not to join the seemingly legitimate money-grabbing scam.

Facebook has always been a source of multi-tiered affiliate swindles that only need a purchase of a primary product or deposit an amount and recruit people. The more people recruited the more commission earned. The products sold by the primary affiliate are often lackluster or even experimental in some cases.

According to WBRC Dental Surgeon Emey Devoll -- interviewed because of her experience in the scheme -- she did profit from the scheme but eventually had to return the money earned. She said that people see "Blessing Loom" as something that has a guarantee compared to a $2 lottery ticket where the odds were high.

Often, Ponzi schemes would use the money earned from the initial "low" deposits of new members to repay initial members of promised amounts. The scheme continues to pay as more people join and deposit. Complicated schemes can provide commissions to members but most do not receive the initial promises and some even lose everything they paid.

Aside from investment scams, employment scams -- ranging from work-at-home occupations to pay-an-employer scams for bigger returns -- also exist. A good way to know if the current fund is a Ponzi scheme is if it only needs some minor effort or makes it appear like so. If it highlights the opportunity more than the product, then it is a Ponzi scheme.

People should fact-check their prospective investment before investing money to avoid believing claims that people or the corporation had earned so much immediately. Another sign is the large start-up cost -- evident in "Blessing Loom's" $100 deposit. The FBI, the US Postal Inspection Service and The US Department of Justice prosecutes Ponzi schemes for securities fraud, tax fraud and money laundering.

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