Better Business Bureau Warns: Cash-Gifting Epidemic Online; Organization Says 22,974 Gifting Videos Posted On YouTube
In the days after the government’s August seizure of tens of millions in the AdSurfDaily probe amid Ponzi allegations, opportunists stepped in to fill the void by offering cash-gifting schemes.
Today, months later, opportunists trading on Ponzi pain are using the names of autosurfs and autosurf-related keywords to drive traffic to cash-gifting websites.
The Better Business Bureau (BBB) says gifting programs and gifting clubs are flourishing on the Internet, taking advantage of families struggling to make ends meet in the poor economy.
BBB has issued a warning “that cash gifting is not a legitimate way to make a few extra dollars, and in fact, is nothing more than a pyramid scheme.”
How widespread is the problem? BBB reports there are 22,974 cash-gifting videos on YouTube. The videos have garnered an “astounding 59,192,963 views,” BBB adds, citing statistics from TubeMogul, an online video analytics company.
Cash-gifting purveyors are “targeting people with some form of an affinity — such as womenâ€™s clubs, community groups, church congregations, social clubs and special interest groups, BBB says.
â€œBernie Madoff isnâ€™t the only guy with a Ponzi scheme,” says Steve Cox, a BBB spokesman. “Money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with todayâ€™s economy.
Run like there’s no tomorrow, warns Cox.
“Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme,â€ he says.
BBB said cash-gifting promotions typically are vague, adding that a video performer “might even open a FedEx envelope with cash inside to prove the effectiveness of the program.”
Scammers often tout the programs as fundraisers for a worthy cause or as “empowerment” programs to help people help themselves. Prospects may be asked to pay anywhere from $150 to $5,000 to join.
Money then is funneled to people farther up the pyramid, and participants then recruit more people to join in order to start making money themselves.
Beware of assertions the programs are legal and sanctioned by the IRS, BBB cautions.
“Almost every state has laws prohibiting pyramid schemes and/or assesses penalties on those who participate, and the Federal Trade Commission and many state attorneys general have issued warnings about cash-gifting clubs, BBB says.
Here are some questions consumers should ask, according to BBB:
- Do I have to make an â€œinvestmentâ€ or give money to obtain the right to recruit others into the program?
- When I recruit another person into the program, will I receive what the law calls â€œconsiderationâ€ (that usually means money) as a result?
- Will the person I recruit have to make an â€œinvestmentâ€ or give money to obtain the right to recruit and receive â€œconsiderationâ€ for getting other people to join?
If the answers are â€œyes,â€ BBB warns people to steer clear of the scheme.
“Donâ€™t give in to tempting claims online and never buckle under to high-pressure sales pitches, even when they come from the mouth of a trusted friend, co-worker, neighbor or church member,” BBB advises.