Most people understand the basics of pyramid schemes: participants recruit new investors, ad infinitum, but since there aren’t an infinite number of people willing to join, eventually, someone will lose out. When you add the layer of social media between participants, which enables anonymity and fosters a potential sense of false trust, the terrible consequences of these scams are heightened.
That’s why it’s troubling to see screenshots taken from Snapchat and other social networks (like the one below) circulating online, outlining what appear to be pyramid schemes framed as “crowdfunding” or “money pools,” many promising that there are “no scams” involved.
The defining feature of these campaigns, if you will, is that they lure new participants to send a sum of money to someone via Snap’s peer-to-peer payment service, Snapcash, or via another service such as Venmo. From there, that individual purportedly enters into a hierarchy through which the process repeats itself: That individual recruits more people to pay…
