In a recent letter to Forum, Gladys White of Belfast alerts us to a scam that has hit the mid-Atlantic states and is trying to creep north toward us.

“I received an e-mail from a cousin in North Carolina,” she writes, “asking me if I was interested in joining a ‘Gifting Club’ she is involved with. She’s all excited but it doesn’t smell right to me. Can you give me any information?”

You have a smart nose, Gladys, and yes, we can.

Well-meaning people such as your cousin are being invited to join these “gifting clubs” that are promoted as private organizations that allow friends to help other friends, often from within their neighborhood, social organization or church group. Remember the “Women Helping Women” or “NASCAR” scams that have cheated many eastern Maine residents within the past three years? “Gifting clubs” are the same scam with different names.

The clubs are illegal pyramid schemes. New members give cash “gifts” to the highest-ranking club members, with titles such as “captains.” They are promised that if they get additional members to join the club, they, too, will rise to become captains and receive money, far more than they paid initially to join the club, from newer club “friends.”

The problem is that, like most pyramid schemes, illegal gifting clubs continually must recruit ever-increasing numbers of members to survive. When the clubs don’t attract enough new members, the “pyramids” collapse. Most members who paid to join the clubs never receive the cash they expected, and lose everything they paid to join the club. The clubs are a cruel hoax.

Generous people are sucked into these schemes by promises of easy money, the benefit of making new friends, and the prospect of being able to help friends, neighbors or people in need.

Once new members have made the “investment” (often $5,000 or more), they are afraid to admit they have been duped. Embarrassed they might appear stupid and gullible, and fearful of losing their cash, they keep recruiting new members hoping beyond hope that it will work out eventually, but it never does.

Often, denial sets in and people involved in the scheme become protective zealots. No matter what friends and associates tell them, they insist that the gifting club plan is a good idea. Even astute, successful businesspeople have been sucked into these schemes. Being gypped doesn’t make you a dummy, just a victim!

Gladys, here is advice for you and your cousin, and anyone else who is approached about one of these clubs. If you are approached about joining a club and think it might be an illegal scam, remember this:

. A legitimate gift is just that, a gift freely given. It has no strings attached and is not an “investment.”

. Avoid being misled into thinking a gifting club is legitimate

just because promoters say

members may 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 in an atmosphere of pressure and anxiety.

If you truly want to do something to help your friends, neighbors and those in need, put your heads together and come up with a local fund-raising plan. And if you are going to make a gift to the effort, don’t expect a cash payback. That’s not charity. It’s venture capitalism.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast COMBAT/The Maine Center for the Public Interest, Maine’s membership-funded nonprofit consumer organization. For help or to request individual or business membership information write: Consumer Forum, Bangor Daily News, PO Box 1329, Bangor 04402-1329.