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  CASH GIFTING SCHEMES  » GIFTING CLUBS LEGAL OR NOT?
   
 

One of the latest programs to hit the Internet again are the Gifting programs.  These programs come in various formats, but all are the same.  You “gift” money to people above you, and get people to join below you so you move up the lineage to begin receiving more and more money from others “gifting” to you.  Of course the promoters always claim these are legal, since you are “gifting” to others so you in turn will receive “gifts” from others.  They always claim that you are doing this without any expectation of receiving a “gift.”  Now, one has to stop and reread that last sentence again.  So you are “gifting” money to a complete stranger(s) without expecting any return of “gifts” to you, so why do you need to join a gifting club in the first place?  Of course you expect to get a “gift” in return or why join?  But here’s the pitch, in their own words, with my comments in bold RED:

   
 

Private Gifting - A Total Team Concept

What is private gifting? Private gifting is a concept that is embraced by a private group of individuals and has been in existence for many years. Our private activity does not involve network marketing, multi-level marketing, or a business or commercial activity. There are no business transactions, investments and/or securities involved in this activity. There is no business or company name or location and there are no directors, officers, shareholders or principals. Individuals simply support each other in a team concept and help change lives. The concept of private gifting is based upon the fact that both American and Canadian citizens have the right to gift property, cash and other assets within the rules and regulations established by the laws.  (The key word is “by laws”)

The Government and state attorney general's offices would really like to not see gifting programs; the reason obviously is that a lot of people stand to lose money in gifting programs that stop or dead end. (True because they all do, but also because they are ILLEGAL)  However , many more people throw their money away at state lotteries  as well as state licensed gambling casinos, but that's okay though. (True because they are legal)  The net is different in that at an influx of 60,000 people per day coming to the net, there are plenty of people to feed a lot of gifting programs. They're not a get rich quick item, but they can significantly add another income stream source to your financial picture.  (As well as taxes, jail time, fines, etc.)

How did this concept begin?

Giving private gifts to one another is an expression of kindness, which has been going on for centuries. Governments have allowed its practice for individuals to share their wealth with families, friends and others. It has been a means of helping and blessing others on special occasions or when the need arises. In fact, to be considered a gift under the Tax Code, the gift “must proceed from a detached and disinterested generosity; out of affection, respect, admiration, charity or similar impulse.” In this activity, there are no expectations for exchange of services or any other valuable consideration between the giver and the receiver. (If true, why join a gifting club, as you can do this yourself) Many cultures gift as a matter of course. Asian, Jewish and South American communities gift individuals within their race and/or culture on a regular basis so that they may start a business or buy a home. They in turn gift someone else to help enhance their lives. Habitat for Humanity is a great example of private gifting. (It is not an example of gifting) Everyone participates with their time, their talents and materials to build a home for someone else. Some participate with a hammer, some with nails, some with food and others with the monetary gifts to purchase the supplies, but all create a team that works together to bless someone’s life.

The key to "gifting" is to NOT expect something in return - this is where SEC has the hardspot with gifting clubs because most of the time when we join a gifting club and gift someone we DO expect to receive a gift returned from someone in the future. (And this is what makes it ILLEGAL, also notice this totally defeats what they said gifting was in the first place)

How does the gifting activity work?

Individuals share using a basic concept that “all things must be done in order” and follow the law of reciprocity—giving opens the way for receiving. (Kind of contradicts the theory you do not expect to get something in return doesn’t it) This activity is offered only by means of an exclusive one-to-one invitation.  When someone accepts the invitation, they move through a natural progression from the giving to the receiving stage of the activity which can take from a couple days to a couple weeks.  (Usually 6 months or longer, if then to see a dime) Everyone rotates through the activity and if they complete the progression, they will receive monetary gifts and well wishes from the team.  In this activity, there is no fixed hierarchy of individuals who have an advantageous position or unfair advantage over new participants. (A total lie, as you have people above you and below you, and that is how you progress up the ladder) You have the ability to receive as much as anyone else in the program that brings the same number of people to the table, no matter when you enter.  (Just contradicted themselves in one sentence)

Concerned about the legality of gifting?

It is 100% Legal according to some; but SEC does not fall in the "some" category. (They are ILLEGAL period in every country, not just the U.S.)  Basically our government instead of helping  people has become a big bully with the primary mission of keeping us broke and in slavery to the JOB. If you look at the last 60 years of economics in America we have become the proverbial frog put in the pot of cold water with the burner turned on to cook to a slow death without even being aware of it.  Our rights have been eroded away, government is trying to disarm us (how many round clips can you buy today for a handgun or rifle), all in preparation for the new World Order coming down the pike. (And all of this pertains to gifting how? Nice for the conspiracy people in our society to believe, but has nothing to do with gifting)

Gifting takes on different forms, and some of the newer versions are what is called the 2-Up format.  It makes no difference what you call them they are still gifting and are illegal.  Now you have seen the pitch, and while some may vary the pitch a little from our illustration, most will almost follow this word for word.  But please don’t take our word for it that gifting is illegal.  Here is what the FTC says about gifting:
   
 

From the FTC Website:
“What is a Pyramid Scheme and What is Legitimate Marketing?

Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.

The Federal Trade Commission consumer warning "Gifting Club Gotcha", which includes the following quite important statement by the Feds:  "Avoid being misled into thinking a gifting club is legitimate because the ads say that members consider their payments a gift and expect nothing in return. This is an attempt to make an illegal transaction look legal."

Consider that a legitimate gift has no strings attached and is not an "investment."   Avoid being misled into thinking a gifting club is legitimate because the ads say that members consider their payments a gift and expect nothing in return. This is an attempt to make an illegal transaction look legal.  Be wary of success stories or testimonials of tremendous payoffs. Very few members of illegal gifting clubs or pyramid schemes ever receive any money.  Take your time. Don’t buckle under to a high-pressure sales pitch that requires you to join immediately or risk losing out on the opportunity. Remember, solid opportunities – and solid friendships – aren’t formed through nerve-wracking tactics.

Not only are such schemes illegal, but the Internal Revenue Service has a nasty surprise for anyone who thinks the payouts are tax-free.

Despite the claims of legality from the clubs' organizers, and despite the dubious contracts members sign stating that the money they "donate" to the club is a gift for which they expect no return, the Internal Revenue Service considers that the participants do indeed expect a return.

The profits are generated solely and completely by recruiting more people into the scheme. You can call it anything you want, the FTC will call it a pyramid scheme, period. Anytime you see FedEx or UPS being used exclusively, learn that the scam artists are doing this to avoid the U.S. Postal Inspectors putting handcuffs on them.”

If you are still not sure, you can check it out on the FTC’s website: www.ftc.com or call toll-free: 1-877-382-4357; TTY: 1-866-653-4261.