Bruning warns of 'Gifting' scam

LINCOLN -- Attorney General Jon Bruning issued a warning to Nebraska consumers not to be taken in by the latest pyramid scheme to come to the state, the "Women's Gifting Guide."

The attorney general was notified of the scheme Wednesday by Red Willow County Attorney Paul Wood after local law enforcement was contacted about the scheme's legitimacy.

"This is a great example of local and state law enforcement working together to protect Nebraskan's," Bruning said. "Pyramid schemes are illegal in Nebraska and often result in devastating financial consequences for participants. Statistics show that only 10 percent of people who join by putting up money ever get a return. If you're approached by this group contact local authorities."

The "Women's Gifting Circle" qualifies as a pyramid scheme because it focuses on recruiting others and there is no product to sell.

Initial "gifts" in schemes like this can be as high as $5,000, and the only way to get the investment back is to invite other women to join the group. Nearly all pyramid schemes eventually collapse due to lack of recruits leaving "investors" out in the cold.

The following are tips consumers can use to avoid being victimized:

* Beware of high start up costs

* Resist the temptation to invest because the people selling are friends or co-workers

* Be suspicious of any group that spends an inordinate amount of time talking about the legitimacy and legality of their operation.

* Contact the Attorney General's office, Better Business Bureau and or the Federal Trade Commission be-fore investing.

For additional information on this scam or other types of consumer fraud, contact the Attorney General's Consumer Protection Division at (800) 727-6432 or (402) 471-2682. En Espaņol, (402) 471-3891 o llamada gratuita (888)850-7555.