This is how the snowball system rips you off!

A group scam is currently circulating on WhatsApp under names such as Schenkkreis or Mandala, which is playing with the hope of flushing a lot of money into the operators’ pockets. Here you can find out how the scam works, what to look out for and whether you might get your money back.

If you fell for a WhatsApp gift circle, you may have a chance to get your money back. At least in Germany you can now refer to a judgment of the Federal Court of Justice when it goes to court.

Gift circles are just one of many scam methods:

How should a gift circle work on WhatsApp?

The pyramid scheme called “Schenkkreis” is not new. It’s a bit reminiscent of the chessboard and grains of rice story: someone should get a reward that consists of rice on the chessboard. On the first field 1 grain of rice, on the second 2 and on the third 4 – and so on. Always twice as much on each field as on the previous one. The man never got his reward because there isn’t that much rice in the world.

Especially in esoteric WhatsApp groups, a few crooks are currently trying again to rip off their contemporaries. Everyone should benefit if only enough people take part.

The system corresponds to an upside down pyramid:

• At the bottom is the first hierarchy level – usually the founder of the circle.
• 8 people in the second level should now “give” him amounts such as 500, 1,000 or 5,000 euros.
• Then the advertising drum should be beaten, so that the 8 participants of the second level of each 8 people on level 3 get these amounts. For level 3, 64 participants are already necessary.
• Each of these 64 people now has to find 8 more victims in order to get money in turn – that’s a total of 512 people.

So this scam requires 8 more participants at each step for each member of the previous tier. In hierarchy level 11 we are already at 8,589,934,592 people and there are not that many people in the world.

The only winners are at levels 1 through 4. The 4,096 people at level 5 will probably get nothing.

Legal situation in gift circles: do you get money back?

In principle, pyramid schemes such as the WhatsApp gift circles in Germany, Austria and Switzerland are considered illegal or immoral. In Austria, the founders of such rip-off chains can even go to prison for up to 3 years. In Germany you at least have the chance to get your money back.

In the past, the courts ruled according to the principle “Anyone who takes part in an immoral business and knows it is to blame for their own loss.But in 2005 the tide turned. The Federal Court of Justice made a fundamental decision that took into account the “nullity” of these Ponzi schemes.

In plain English this means:

• Ponzi schemes such as the gift circle are immoral and therefore “void”.
• This means that it is not a legal transaction.
• So that the organizers of such systems no longer benefit from the fact that the participants are “their own fault”, it was decided that the stake can be reclaimed at any time.

This was confirmed in a subsequent judgment and is now common practice in German courts. However, there are exceptions if an “experienced player” demands his money back. First and foremost, those participants who have not gullibly seen through the system are protected.

So if you participated in a WhatsApp gift circle that suddenly collapses, find a lawyer and ask for your money back.

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