SCAMS BULLETIN Host Jay White is a volunteer attorney in San Mateo County, California.

August 11, 2020

FAKE SAVINGS CLUBS

Courtesy Federal Trade Commission

Imitation is a great form of “scammery.” That is why scammers are imitating a type of informal savings club known as “sou sou” or “susu”. They aim to trick people into joining what amounts to an illegal pyramid scheme.

A real “sou sou” is a rotating savings club with historic roots in West Africa and the Caribbean. It is a savings arrangement among a small group of trusted people – usually family and friends – who regularly pay a fixed amount into a common fund and take turns taking money out. In a real sou sou, you do not earn interest, never get out more than you paid in, and there is no reward for recruiting people to join. This is a way of saving based on the honor system, and it is not without risk from dishonest fellow depositors.

It is not surprising that scammers are pitching FAKE sou sou savings clubs with names like “The Circle Game,” “Blessing Loom,” “Money Board”. These kinds of illegal pyramid schemes are the exact opposite of a real sou sou: They falsely promise you will make more money than you put in. They depend on recruiting new people to keep money flowing into the fund. Like all other pyramids, once they run out of new recruits to bring money into the club, the money dries up, leaving everyone holding the bag waiting for their pay out.

If you see a post or receive a direct message on Instagram, Facebook, or other social media about one of these clubs, be cautious and look for warning signs. If the phony offer has been received by a friend or family member, tell them about this scheme.

And, if you have been contacted to join a fake sou sou, please tell us: http://www.ftc.gov/complaint. Your report can help us protect others from a scam.

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