ATTORNEY GENERAL ALERT Be aware of illegal 'Ponzi schemes'

LITTLE ROCK -- The COVID-19 pandemic has sparked concern about more than just personal health -- it has created economic hardships for many Arkansans. As many seek to ensure they can pay their bills, illegal Ponzi schemes disguised as goodwill gestures such as so-called "Blessing Looms" are freely shared on social media that will ultimately steal money from those who fall prey, according to the Arkansas attorney general's office.

"If it seems too good to be true, then it probably is," Attorney General Leslie Rutledge said in a news release. "Blessing looms scams and other Ponzi schemes will ask for you to pay a small amount of money in order to receive a large payout as more people participate. I want every Arkansan to be aware of these schemes so they can keep their hard-earned savings in their wallets."

Scammers use the "Blessing Looms" scam by posting it on social media and ask unwary readers to pay an entry fee, such as $100, with the promise that, as more people pay to build the pot of money by paying the entry fee, the participant will also get a payout as much as $800 of that money. The surest way to identify these scams is if they promise large payouts in return for small investments, if they tell factually unsupported "success stories" of happy customers, or if they explain that future results rely on bringing in new participants to the scheme, the release said.

To protect against Ponzi schemes:

• If something sounds too good to be true, then it probably is. Know that large sums of money generally do not result from small investments.

• Consult the terms of use for Facebook and other social media platforms and report such scams as these platforms may prohibit schemes like this one.

• Safeguard banking and financial information in order to prevent theft due to scams.

• When using the internet, ensure that you are using a verified, secure, and encrypted website when sharing any personal or financial information online. Instead of clicking embedded links, consider typing the company's actual URL website address in the search bar.

• Do not disclose personal information to an unknown person online because it could result in identity theft or the opening of other accounts in their name.

Call the attorney general's office at 800-482-8982, email [email protected] or visit ArkansasAG.gov for more information.