Md. Attorney General Frosh cautions social media users to avoid falling for pyramid schemes

Maryland Attorney General Brian E. Frosh warned on Thursday of online pyramid schemes appearing on social media sites this holiday season.

The Office of the Attorney General specifically cautions against the so-called "Blessing Loom" scheme. The scheme involves tricking participants into paying a small fee with the promise of earning up to $800 in return for recruiting others to do the same.

Attorney General Frosh says programs that offer no products or services, yet supposedly guarantee monetary returns, are likely illegal pyramid schemes.

"Consumers shouldn't be fooled if recruiters swear the scheme works, or must be legal, because they received some money," Attorney General Frosh said.

State officials report that pyramid schemes are illegal in all 50 states and that promoting or advertising such a scheme in Maryland is a criminal offense that could result in a large fine or even prison time. They advise Marylanders to warn friends and family not to participate.

Though pyramid schemes have existed for time immemorial, modern day pyramid scheme promoters often use social media and online payment services like PayPal to prey on unsuspecting citizens.

Officials say that because of the nature of pyramid schemes, relying exclusively on new investors funds, they are destined to run out of momentum and fail.