Better Business Bureau warns women of 'Gifting Circle'

The Better Business Bureau is sounding the alarm about a scam aimed at bilking affluent Lower Mainland women of thousands of dollars.

The BBB calls the scam a Gifting Circle, but it also goes by 'Women's Financial Circle, 'Women's Financial Collective' and 'Women's Wisdom Circle'.

It says the scheme is nothing new, but it comes up every few years. The warning comes after several women recently contacted the BBB about being invited to these parties.

The consumer watchdog says the way it works is women are lured in with the promise of a $40,000 payout for investing $5,000 and recruiting friends. It says the scam alludes to female empowerment and its organizers claim to create abundance and spiritual healing for those who sign up.

Parties held under false pretense

The parties are often held under the pretense of helping a woman in need or a family that needs help. The BBB says in reality those who participate are giving their money to the person at the top of the pyramid as they recruit others to join. 

"It may take a couple of wine parties or two to entice women to part with their money," said Evan Kelly, senior communications adviser for BBB Mainland B.C.

"After all, a friend asked you to join, it couldn't possibly be a scam, right? The buy-in is cost prohibitive to many, so those in a more affluent demographic are often the targets of these schemes."

Eventually the pyramid falls apart and those paying the top member lose thousands.

How to avoid falling victim

Here are the BBB's tips to avoid a pyramid scheme:

•  Be wary of "opportunities" to invest in things where the success or failure relies on recruitment. 
•  Independently verify the legitimacy of any franchise or investment before you invest. 
•  If it seems too good to be true, it is. 
•  Investigate. Ask around. Search online. Be skeptical. 
•  If no product or service is being offered or sold, how does it make money? 
•  Invest your money with reputable investment professionals and firms with a track record. 
•  Be very wary of investments that promise low risk and high returns. 
•  Don't let greed overcome good judgment. 
•  Getting involved could have a negative and lasting effect on friendships. 
•  If you have any concerns contact the BBB 
•  Investment concerns can also be directed to the B.C. Securities Commission