What Are Legal Gifting Programs, and How Can You Identify them?What are Legal Gifting Programs? What constitutes a legal gifting club? This question has been much debated and the answer depends on whom you ask. The detractors of the activity of gifting will tell you that all such programs are bound to be frauds and scams. Such persons will point to several gifting clubs which have been shut down in the past for their alleged illegal activities. According the promoters, participants and supporters, their cash leveraging activity is 100% legal. They do this by appealing to the sections of the US tax code permitting individuals to freely bestow gifts to others, within certain guidelines. Promoters and defenders of legitimate, though not necessarily legal gifting programs, often argue that:(i) A gifting club is not a business, and therefore your unconditional gift does not entitle you anything beyond the membership into the club.(ii) A gift is given freely, without compulsion or pressure and without the expectation of any compensation. Neither the program nor the receiver owes the giver anything.(iii) A gift is neither a purchase for goods and services, nor an investment opportunity or a loan.(iv) If properly organized and ethically run, any legal gifting activity simply consists of like minded individuals who come together for the purpose of helping each other achieve financial freedom based on the pass it on principle: As you do to others so shall it be done to you; give and it will be given to you. Many reasonable people would have little sympathy with those who sign a non-solicitation form, and thus acknowledge that they are not expecting any return on their gift, only to turn round and cry scam simply because they fail to make money in the program. On the other hand it is equally disingenuous for promoters of gifting programs to claim that the gift is not an investment. Most people join gifting programs principally in order to make a profit by leveraging their money! The program managers know it, and we know it. Both the supporters and detractors of cash gifting would probably agree on most of the following points:(i) The section of the US IRS usually quoted to support and justify the activity of cash gifting was never intended (i.e. in spirit) to cover private gifting clubs. (ii) Tax evasion is illegal, those who fail to declare the income obtained through their gifting activity, can expect to be prosecuted accordingly. (iii) The laws against illegal pyramid and Ponzi investment scams are intended to deter fraudsters from obtaining money from their victims by deception and ought only to be applied to a gifting club (or any other business activity), if fraud, deception or misrepresentation is suspected to have taken place. (iv) Obtaining money by misrepresentation and other deceptive practices is illegal. A legal gifting activity, amongst other things, would have to be structured and run in a manner that avoids some of the above offences:(i) All participants in the activity should have the same income earning opportunity and potential, thus avoiding the pyramid scam tag. (ii) It should be devoid of hype, which can very often mislead a prospect into joining an activity without fully understanding what they are getting into or what to expect. On watching the flashy videos, fancy landing pages and the hype many a prospect join the wrong program with wrong motives and wrong expectations!(iii) The activity should be registered with the authorities, and thus have a legal status, either as a non-profit organization or a business.(iv) If properly organized and ethically run, any legal gifting activity would then simply consist of like minded individuals who come together for the purpose of helping each other achieve financial freedom based on the pass it on principle: As you do to others so shall it be done to you; give and it will be given to you. In the final analysis, the question of what is or is not legal gifting depends not so much on the structure and management of a particular program, but even more importantly, the country or province in which you live: Cash gifting and the law in the US and Canada: Many cash gifting promoters often justify their activity by appealing to the IRS tax code, (link). However, it is worth noting that nearly all the prosecutions to date in relation to cash gifting clubs have been for deceptive practices and the law against pyramid and Ponzi schemes. Once a complaint is made to a State Attorney General or the Federal Trade Commission, there are usually whole rafts of statutes under which the accused can be charged. These may range from consumer fraud law and theft-by-deception statutes, anti-pyramid and securities laws, to theft, lottery and mail fraud. In Canada, in addition to any provincial statutes, offenders have been prosecuted under the Disorderly Houses, Gaming and Betting Act. According to this law, “..Everyone is guilty of an indictable offense and liable to imprisonment for a term not exceeding two years who conducts, manages or is a party to any scheme, contrivance or operation of any kind by which any person, on payment of any sum of money, or the giving of any valuable security, or by obligating himself to pay any sum of money or give any valuable security, shall become entitled under the scheme, contrivance or operation to receive from the person conducting or managing the scheme, contrivance or operation, or any other person, a larger sum of money or amount of valuable security than the sum or amount paid or given, or to be paid or given, by reason of the fact that other persons have paid or given, or obligated themselves to pay or give any sum of money or valuable security under the scheme, contrivance or operation”;
Click here examples of several examples of prosecutions for cash gifting activities.
Gifting Programs and the Law in the UK and Australia: The UK Office of Fair Trading as well as the Consumer Protection Agency has been known to prosecute those accused of a cash gifting offence under a variety of laws. Under the gambling Act of 2005 http://www.opsi.gov.uk/.../ukpga_20050019_en_4#pt3-pb3-l1g43http://www.gamblingcommission.gov.uk. ,it is unlawful to promote “ …a chain-gift scheme”. Under the act, “(1) A person commits an offence if he— (a) invites another to join a chain-gift scheme, or (b) knowingly participates in the promotion, administration or management of a chain-gift scheme. (2) An arrangement is a "chain-gift" scheme if— (a) in order to participate in the arrangement a person must make a payment to one or more other participants (a "joining fee"), and (b) each person who participates in the arrangement— (i) is required or invited to invite others to participate, and (ii) is encouraged to believe that he will receive the joining fees, or part of the joining fees, of other participants, to an amount in excess of the joining fee paid by him. (3) For the purposes of subsection (2)— (a) "payment" means a payment of money or money's worth, but does not include the provision of goods or services, and (b) it is immaterial whether a payment is made directly or through a person responsible for managing or administering the scheme. (4) A person guilty of an offence under this section shall be liable on summary conviction to— (a) imprisonment for a period not exceeding 51 weeks, (b) a fine not exceeding level 5 on the standard scale, or (c) both. (5) In the application of subsection (4) to Scotland or Northern Ireland the reference to 51 weeks shall have effect as a reference to six months. 44 Provision of unlawful facilities abroad (1) A person commits an offence if he does anything in Great Britain, or uses remote gambling equipment situated in Great Britain, for the purpose of inviting or enabling a person in a prohibited territory to participate in remote gambling. (2) In subsection (1) "prohibited territory" means a country or place designated for the purpose of this section by order made by the Secretary of State. (3) An order under subsection (2) shall prescribe the mode of trial and maximum penalty for an offence under subsection (1).” In Australia it is an offence under the Fair Trading Act to promote or take part in pyramid schemes, with the victims additionally permitted to pursue offenders through civil action for damages, www.docep.wa.gov.au/wascamnet. http://www.commerce.wa.gov.au/Corporate/Media/statements/2004/November/Pyramid_scamsters_fi.html Promoting a Program with no Associated Products is Illegal: It is clear from the above summary that in much of the English speaking world the authorities can and do prosecute people for running any gifting activity which appears to be a pyramid chain. Even legitimate programs without a manifestly pyramidal structure are vulnerable if it does not involve any products associated with it. This is unfortunate to say the least. The reason why Ponzi schemes and other marketing pyramids are scams is because in such schemes, eventually the money that the program is generating is less than that which is been paid out to the ever widening base of recruits. Such is obviously not the case with a properly structured cash gifting program, in which all transactions are direct member-to-member. Making the Programs Legal: Some club administrators have tried to their activity into legal gifting programs by introducing digital products. While others like the “Uniting US All” activity, have re-structured their program in a way that appears to comply with most of the applicable laws. By definition a legal gifting program is one which complies with the law. Many people have found that a well structured and honestly managed gifting program represents one of the easiest means for ordinary folks to earn 6-figures online and gain financial freedom. This however does not make it a legal gifting program. Popular programs like the People’s Program and Abundant Living System are all well-structured and properly managed. But as long as they continue to operate without giving out an actual product in exchange for the administration fee, then it is only a matter of time before authorities pick on them, and they will find themselves going the same way as Elite activity did some years ago. After all, as we have seen above, as long as there is no exchange of products, many of the state and national laws will render the programs a scam and the promoters are then liable to prosecution. The real challenge to the owners of such gifting programs is to adapt or die. Experience has shown that the standard device of claiming that the activity is not a business or an investment opportunity, or the signing of non-solicitation forms, has not prevented prosecution and conviction by the authorities. Adapt or Die: Likewise, those seeking to participate in a program should ensure that it is a legal gifting activity according to the laws of their country, state or province.. Our reviews section contains a selection of both legal and illegal programs (according to US, UK, and Canadian authorities). We are convinced that the future is for promoters to make their programs legit by creating legal gifting programs. It is good for promoters and participants alike. Legal gifting is the way to go.
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