As the world economies grapple with the financial shakeup presently occurring across the globe, It’s hard not to be sold on the altruistic and cultural backstory of the sou-sou, also known as “Susu,” “blessing loom” or “gifting circle.” Promoters pitch the sou-sou as a common practice among Caribbean and African immigrants as a way to help their businesses grow.

Melanated Media interviewed someone that nearly fell victim to the scheme.  He was told he would be helping the black community and other black people, grow and save money together in a cooperative manner.

If he wanted to accept the invitation to join the “group” he would required to “gift” $500 to someone in the group when joining. This action pitched as “sewing” your contribution.

Within the following 1-4 weeks he would have needed to invite two family or friends to join. Those two invitees would then also pay $500 each, to someone in the group. This process rinses and repeats, with each invitee in the second week bringing two more members, who each also pay $500.

At the conclusion of 4 or 5 weeks, you have $4,000, and then pay $500 back into the group and invite another two people.

For the past several weeks readers have asked us about the legitimacy of a “sou-sou” or similar schemes.

Despite assurances by promoters, these blessing, sou-sou, or gifting circles are illegal.

The clear sign of an unlawful pyramid can be determined by two main factors: (1) an upfront entry fee with the expectation of a significant payout and (2) the requirement to persuade two other people to join, who then must also bring in two more recruits.

Eventually, the whole pyramid scheme collapses, and the last people coming i the group, lose their money.

The sou-sou can appear to be a success because early participants share testimonies of their substantial gains. Weekly conference calls serve to rally people with motivational presentations about how their involvement will help build wealth in the Black community.

“Just don’t do it,” Maryland Attorney General Brian E. Frosh said in an interview. “Think about it. How is it possible for everybody to get $4,000? It is a crime to be part of this and soliciting people for it. It also means that you’re putting your friends and family members at risk. There are way more victims than winners in these pyramid schemes.”

Frosh said his office has seen an uptick in pyramid schemes as the pandemic has resulted in massive job losses. The Better Business Bureau, the Federal Trade Commission (FTC) and many other state attorneys general have issued consumer alerts.

“At a time like this, when there’s so much financial hardship, we see these and many other kinds of moneymaking schemes spreading like wildfire, especially on social media,” said Kati Daffan, an assistant director in the FTC’s division of marketing practices. “Schemes like this are illegal because they’re inherently harmful.”