Manchester City Council

Women Empowering Women "Gifting" Scheme - It Could Seriously Damage Your Pocket!

Trading Standards wants to warn people about  "gifting" schemes operating widely in the UK under various names.  Far from empowering women, it could leave your seriously out of pocket.

Patricia Hewitt MP, Secretary of State for Trade and Industry and Minister for Women warns; "These schemes have a nasty sting in the tail and prey on vulnerable women.  I am extremely concerned that many have lost thousands of pounds of their hard-earned cash and potentially many more will lose out.  I want the public to be aware of the risks associated with schemes of this kind.  I would urge them to think long and hard before they get involved, and then think again."

How it Works

The scheme works like a chain letter and only women can take part.  It is based on individual contributions or "gifts" of £3000 given to a member of a network (usually a family member of frient).  In return, each participant may expect to receive multiples of that amount up to £24,000 as they progress through the network hierarchy.  However, this is dependent on new participants continually joining the scheme.

The danger is that these types of networks break down as the pool of new investors eventually dries up.  Participants joining the scheme late stand a good chance of losing their original contribution never mind any return.

All schemes where money changes hands may be subject to the general criminal law on fraud, theft and deceit.  Anyone with evidence that a criminal offence may have been committed should report the matter to the Police immediately.

Since the Gambling Act, 2005 it is an offence for a person to invite someone to join a chain gift scheme or for them to knowingly participate in the promotion, administration or management of a chain gift scheme.

Why Chain Gifting/Pyramid Schemes cannot work for most participants

The risks are clear.  For example, if eight people invest £3,000 each and then progress through the levels of the network, they will each expect to received £24,000 when they reach the final level.

If each of those eight people are to receive that sum however it will be necessary for 64 people to have each invested £3,000.  Each of those 64 investors will be expecting to collect their £24,000, but that would mean that 512 people would now have to invest.  The next level would require 4,096 participants then 32,768 then 262,144.

In simple terms each participant needs another 8 investors in the scheme to get their money back and make a return.  The supply of potential investors will dry up, leaving the majority of people in the scheme having paid out a large sum and receiving nothing in return.

Click here for the above information in Urdu (pdf file)

Don't be a Victim, please think carefully.

To report such schemes please telephone the Police on 0161 872 5050 or Consumer Direct on 08454 040506