Don't fall for 'gifting cloud' pyramid schemes, warn Drumheller RCMP

Don't fall for 'gifting cloud' pyramid schemes, warn Drumheller RCMP

Drumheller RCMP have issued a warning following what they say is an increase in invitations to participate in "gifting cloud" pyramid schemes in the southern Alberta town.

The events, also known as "pay-it-forward clouds" or "gifting circles," emerge every few years under different names due to the stigma associated with the scams, police said. 

Attendees are promised that if they invest a sum of $5,000, and recruit two to six more investors, they will receive a gift of $40,000 between four months and a year later.

Language designed to trick participants

"The language used is designed to make the women (and occasionally men) believe that it's a 'community' which helps people be financially independent and/or contribute to society in a positive way. They will be made to feel important, being told that it is an anonymous, invite-only event," police said in a release Tuesday.

RCMP said people should know that "clouds" are pyramid schemes that are illegal in Canada, despite the positive language used.

Pyramid schemes are defined as "frauds that are based on recruiting an ever-increasing number of investors," according to the Canadian Anti-Fraud Centre.

Police say those being recruited for these events should do their research, and report any occurrences to the Canadian Anti-Fraud Centre at 1-888-495-8501.

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