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Department of Insurance, Securities and Banking

Learn if a 'Sou-Sou' Is Legit or Fake Before Investing

The District of Columbia Department of Insurance, Securities and Banking (DISB) wants District of Columbia consumers to beware of fake sou-sou investment schemes.

A traditional sou-sou is an informal savings club widely known in West Africa and the Caribbean that dates back many generations. In its purest original form, a sou-sou was a savings arrangement between a trusted group of family and friends. But scammers are using the concept for dishonest means.

In a traditional sou-sou, the members pay a fixed, equal amount of money into a common fund on a weekly, bi-weekly or monthly basis and take turns getting paid out on an agreed-upon schedule. The group selects a treasurer who collects the members' contributions. The pool rotates until all members have been paid out their agreed-upon share. For example, if 10 members contribute $100 a week, each week a member may receive a $1,000 lump sum and the cycle would repeat after 10 weeks. The members do not earn interest and there is no reward for recruiting participants. Although there are legitimate sou-sous, there are also scams parading as sou-sous that are illegal pyramid schemes.

Scammers are using the word sou-sou to lure consumers into illegal pyramid schemes like "The Circle Game, Blessing Loom, and Money Board." Many victims are older and more trusting because of their familiarity with the legitimate sou-sou. The fake sou-sous are schemes promising to make contributors significantly more money than all of the members' total contributions, especially if they recruit new members. These schemes depend on contributors recruiting new members to keep the money flowing into the fund. When there are no more recruits, the money runs out. This leaves later contributors--those near the pyramid's bottom who are the last ones to join--without a payout and the loss of their original investment.

These schemes may be promoted or recommended by friends, family members, through email, U.S. mail, phone, Instagram, Facebook and other social media.

Consumers should beware of illegal scams that may appear to be legitimate sou-sous. If you are solicited to participate in a sou-sou or believe you have been a victim of an illegal pyramid scam, please contact the Enforcement and Consumer Protection Division of the District of Columbia Department of Insurance, Securities and Banking at (202) 727-8000.