The pyramid scheme has a new look and the Oregon Division of Financial Regulation is warning consumers to steer clear. Gifting clubs, such as Death Row, are illegal pyramid schemes that are scamming several Oregonians.
The Death Row gifting club, not associated with Death Row Records, was operating in Oregon last year. It advertised on social media and in online forums as a community wealth share group. More than 20 Oregonians lost their initial $1,400 investments.
The Death Row gifting scheme promised financial returns of at least $9,000. The division was alerted to the scheme when an Oregonian reported not receiving anything in return for their $1,400 investment. The investment was not registered with the division and no one was licensed to sell investments in Death Row. Victims invested their money using a cloud-based payment platform and communicated with others about the investment during online forums for the Death Row program.
The division is still investigating the Death Row gift club. Anyone who has information about the scheme or was a victim of it are asked to contact the Division of Financial Regulation Advocacy team at 888-877-4894 (toll-free).
“If someone invites you to join a gifting club, just say no to their high-pressure tactics and stories of high earnings,” said TK Keen, Division of Financial Regulation administrator. “The simple reality is that only a few people profit from these schemes at the expense of everyone else who ultimately lose their investments.”
Gifting club schemes are similar to pyramid schemes because no new money is created. Members of the scheme encourage friends, family, and co-workers to give gifts of cash to higher ranking members. The only way for a person to recover the initial investment is to bring new members into the scheme.
The division has three tips to spot an illegal gifting scheme:
- Promises of cash, gifts, or electronic payments via mail, email, or social media
- The primary focus is to recruit new investors – no goods or services are being sold
- No written agreements and the promoters boast about high earnings of a few people
Oregonians are encouraged to contact the Division of Financial Regulation’s consumer advocacy team if they spot a gifting scheme or believe they are a victim of one. Advocates can be reached at 888-877-4894 (toll-free), email email@example.com, or by visiting dfr.oregon.gov.
Do not become a victim of an illegal gifting scheme. Be skeptical about investment opportunities, avoid giving your personal information to strangers, and remember – if it seems too good to be true, it probably is.
For more information about investments and protecting yourself from investment fraud, visit the division’s avoid investment fraud page.
Source: Oregon Department of Consumer and Business Services