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SCAMMED by the Blessing Loom

With the world plunging into economic crises due to Covid-19 and mandatory lock-downs, it isn’t a surprise that fraudulent economics is rearing its ugly head everywhere. The most common being “the blessing loom”. It goes by other names such as:

  • Blessing Bank
  • Infinity Loom
  • Snowflake Blessing
  • Giving Circle

How it started

This pyramid scheme first surfaced in 2016 when Derek Loom, an American citizen roped in ‘blessed investors’ via social media. He was arrested in 2019, but by that time, he had already made at least 10 Million USD and authorities couldn’t press any real charges against him, as per various media reports. The scam easily and quickly reverberated through the four corners of the earth, via the worldwide platform, Facebook.

How it works

Persons are usually recruited by invitation only. With a small investment of let’s say $100, through some digital payment service like Paypal or Venmo, you can spread the wealth, and see a huge return on the money (your ‘entry fee’). The only catch is that you have to recruit other ‘investors.’ They, in turn will invite others and the goal is for everyone to end up making loads of cash. It’s evident on social media right now, that persons are posting their invites directly in groups and on their facebook walls with captions such as “inbox me” or “find out how!”

How you lose

This sounds like heaven! Right? Unfortunately, in most cases, it ends up being hell for most unsuspecting hopefuls. The trouble with the scheme is its reliance on recruiting others in order to keep the ship afloat. Once people stop participating, the money ship sinks. This will leave lots of disappointed people to lose the cash they initially invested.

The idea of the blessing loom is similar to that of a ponzi scheme. According to invesopedia, A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. They sound pretty much identical!

Derek Loom, who started the blessing loom in 2016

Tenesha’s Story

Tenesha W. 27, from Brooklyn NY was employed as a pre-school teacher before covid-19 struck the USA in January 2020. The pre-school soon closed its doors indefinitely and she was forced to apply for unemployment benefits. Being a single mother, having 3 children aged 5 -13, with no income and no assistance caused Tenesha to go into depression. Soon, she was offered a rope in the dark. A friend of hers contacted her and asked her to invest $100 to join the loom. Her friend explained how it worked and she was on board. I mean, how hard could it be to find two people, right? That she did. Once Tenesha received her $800 ‘hand’, things started looking up for her. She decided to try another group. She made another $800 and then another. This was way more than she had bargained for! Things were definitely turning around for her.

One day, she saw a post on social media that offered way more than just $800. This time, you could invest $625 and gain $5000. This seemed like some kind of miracle. Tenesha was quick to message the poster and join his group. Her early gains were being depleted and she needed a quick fix so that she could at least pay something on her rent and stock up on some much needed groceries. She could only dream about getting her hair and nails done again. Once she joined, she embarked on her mission of recruiting the required investors. She invited the friend that recruited her in the first place, but she wasn’t interested as the stakes were a bit high for her. Instead, she was met with- “Girl, why didn’t you stick with the $100 groups!?” Tenesha was puzzled since her friend was so confident when recruiting her. This seemed like a sure thing, so why not up the stakes a bit? She continued her recruiting mission and finally secured her people.

Everyone was finally in! Her recruits also had the job of recruiting their own people so she just sat tight for a bit until it was her turn to receive her blessings. Days passed, weeks passed, and she sent countless messages to her group chat asking why it was taking so long for her payout? Was anyone else getting paid? She was always met with the same response. ” The money is coming, everyone has to wait their turn.” By this time, two months had passed, and her ‘winnings’ from previous ‘blessings’ were already gone. “Count this one as a loss, sis” her friend advised. This statement came much to Tenesha’s surprise because she had been so sure the plan was all fail-safe. “Why didn’t you tell me this sh#t wasn’t sucker proof? I need my $500 back!” By this time, the group had grown stagnant, and most members were either leaving the whatsapp group or had stopped responding altogether.

Tenesha made a formal complaint to the NYC police department in the hopes of getting back the $625 she had invested. However, her case was difficult to bring to a close and she basically got no where. Although these schemes are illegal in NYC, it is difficult to prove that the funds are taken/stolen rather than ‘gifted.’

More on how the loom works

CBS 19 provided these tips on how to avoid social media scams:

  • Stay alert to pyramid schemes. Pyramid schemes promise quick profits for recruiting others. Scammers prey on the desire to make a lot of money with very little effort. But remember, pyramid schemes are illegal in the United States and Canada.
  • Be skeptical: Before you accept any offer on social media, do your research. Just because something appears to be fun and was shared by a friend, doesn’t mean there isn’t an inherent risk. Many of these offers include extravagent promises that aren’t kept.
  • Monitor Friend Requests. Don’t accept friend requests from people you don’t know. Also be wary of a second friend request from someone you are already connected with; the second profile may be an imposter trying to access your data and your friends list.
  • Ask questions and research the offer before joining any business venture. What appears to be a legitimate investment could still be a pyramid scheme. Check business ratings and reviews on BBB.org and other search engines before agreeing to work with or invest in any company or individual.

According to the office of the NY Attorney General, people invest in pyramid schemes for various reasons. These include:

Those who participate out of greed;

Those who are misled into thinking that they are joining an “investment club” or a “gift program”;

And those who believe that the products or services are legitimate.

One Way to actually Build Wealth

The major problem with these schemes is that you’re basically promising something you can’t guarantee. BWM recommends doing your research and joining a proper ‘box hand’ or ‘sou sou’ instead. According to Essence Magazine, A sou-sou (also spelled sou sou, su-su or susu) is an informal rotating savings club, where a group of people get together and contribute an equal amount of money into a fund weekly, bi-weekly or monthly. The total pool, also known as a hand, is then paid to one member of the club on a previously agreed-on schedule. The pool rotates until all members have received their share.- Sounds Legit.

Related: More on sou-sous

There are actually sou-sou apps. See more here or explore them on Google Play.

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Black businesses will not survive without the support of black people.

BY TARYN ST.LOUIS, JUNE 10, 2020

Why buy black? It is a fact that the race that does not support it’s own, will be controlled by those who do. Buying from black businesses in your community not only supports a dream, it will also raise the economic power of the people. Black owned businesses and black consumers are a necessary alliance. In 2015, black people represented over 1.1 trillion dollars in spending power. This spending power was mostly exercised in markets outside of the black community. If this spending power was used within our own communities, can you imagine what that would mean?

Why do we support others instead of our own?

Let’s think deeper on this. Wide spread psychological programming has powers that many refuse to accept. According to Established Author, Michael Rice, “Psycho social conditioning including the Willie Lynch effect, racism and post traumatic slave syndrome contribute strongly to the black condition. To ensure compliant and submissive slaves, The Willie Lynch syndrome was instituted which was a brainwashing process that resulted in mental control of the behaviors of captive slaves.” Think about it for a minute. There were more slaves on those plantations than there were slave masters. The only way to ensure control was to implement a system in which we devalued ourselves in favor of others. Of course, this did not work on everyone, especially the mentally strong, but the masses were left virtually defenseless as their minds were held captive most times in bodies that could’ve easily escaped to freedom. The challenge therefore, is for us to start seeing ourselves as worthy.

According to Cashmere Nicole Carillo, Founder of Beauty Bakery in San Diego, “Now is a time for everyone to create change and a lasting legacy.”

What can we benefit?

There is no blueprint for change, but we can show you why making changes in the way we spend can benefit us tremendously:

  1. Lower unemployment in our communities
  2. Enrichment of our own communities
  3. Greater Control of our own communities
  4. Creating a legacy for our bloodlines
  5. Closing the racial wealth gap

How can we fix it?

Let’s start with the business owner. It is time to take your business seriously. There is no blueprint for success, but your perseverance in business matters. If you don’t take the time to research what you’re selling and understand your market, your business is likely to fail. Take the time to learn the importance of a good customer- client relationship and remember that the well – known phrase, ‘the customer is always right’, does not mean that the customer cannot be wrong; it highlights the fact that the customer is ‘king’. Without a customer base, you will have zero profits. Read that again!

There are no friends in business. Establish your professionalism and ensure that your friends understand this before you even start selling to them. Your reputation will be your legacy. Do not sell inferior products or products that you don’t believe in yourself. Marketing is paramount! If you don’t have a marketing team yourself, research affiliate programs that can benefit your business, or take the time to get in depth knowledge of marketing so you can be your own team. Finally, did I say that your perseverance in business matters? Don’t give up!

It’s up to us!

Want to buy black? Yes you do! Research black owned businesses in your community. If you need a particular product, find out if there are any black owned businesses that you can buy it from. This is not a quick fix, but we can do this over time. Every time you feel the urge to buy something, ask yourself.. in what possible way can this purchase benefit my community and the generations after me?

Here are 10 black owned business sites you can review:

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