Alaskans should be wary of a pyramid scheme called “The Blessing Loom,” the state’s law department announced.
The scam is currently believed to be operating in multiple communities across the state, said Alaska Department of Law in a news release.
“During these difficult times Alaskans should be wary of investment scams,” said acting Attorney General Ed Sniffen in the release. “if it sounds too good to be true, then it probably is.”
The scheme is often perpetuated on social media, according to the department. A new participant will be asked to join a “Blessing Loom” by providing a gift, blessing or investment of anywhere from $100 to $1,500. Each participant is required to recruit two new members and promised an eight-fold return.
Like all pyramid schemes, the scam requires a growing number of new participants. Eventually, the pool of new investors dries up, the pyramid crashes and the majority of people lose money.
Pyramid schemes are illegal under Alaska’s Unfair Trade Practices and Consumer Protection Act. Under the act, violators face civil penalties of up to $25,000 per violation. Participants in such schemes may also be subject to criminal prosecution.
The Department of Law encouraged people who have participated and obtained earnings in such schemes to refund money immediately. Victims of these or any other unfair trade practices are urged by the department to file a consumer complaint with the Attorney General’s Office.
• Contact the Juneau Empire newsroom at (907)308-4895.