Recently, the Federal Trade Commission (FTC) issued a warning about a popular new money scheme that promises big rewards. This scam has co-opted the concept of a “sou sou” to capitalize on the fears of many during the pandemic. Here’s how to identify and avoid these scams to protect yourself, your business and the entire Kynect Family.
What’s a Sou Sou?
A traditional sou sou is an informal, rotating savings club that asks its members to contribute a set amount of money on a predetermined schedule. Then, each member takes turns getting a payout. Members receive the exact amount they pay in, and there’s no compensation or reward for recruiting others.
Sou Sou Scheme Overview
Scammers have taken the traditional sou sou concept and turned it into a pyramid scheme. They promise members will get more than they pay in, several times over. Members only get paid after they’ve recruited others to join and pay into the pot.
Here’s the catch: The dependency on recruitment to keep cash flowing in often means funds dry up before members can get their payout.
Collecting money, promising interest earned or profit gained, all without an exchange of goods or services, checks all the boxes for an illegal pyramid scheme.
What Can You Do?
Stay informed and aware! If you’re invited to a sou sou, “blessing loom,” “gifting circle” or “money board,” we strongly encourage you to pass on the offer. We’ve learned some Associates may already be promoting or participating in these schemes, and we can’t stress enough that the consequences are serious, including fines and jail time—not to mention the risk it carries for Kynect and your business—if you’re caught in these scams.
If you’re invited to participate, be skeptical, do your research and ask questions. Talk to your teams about these scams and make sure they know how to spot red flags. These simple actions will go a long way to protecting yourself and Kynect!