Women Robbing Women.(investment scheme defrauds women)(Brief Article)(Statistical Data Included)

The Women Empowering Women flier reads like the manifesto of a feminist collective. "Our main goal is the empowerment of women by providing for them the financial and emotional abilities to support themselves, their loved ones and their community," it says. "We are literally creating a new economic experience." The mimeographed fliers are passed through networks of friends and acquaintances and handed out at parties for this women-only "gifting circle" that has recently won members all over Britain. To join, you simply hand over [pound]3,000, which buys you a "heart," representing a link in the gifting circle, on a mimeographed sheet of hearts. Find eight friends or relatives willing to do the same, and you can leave the circle with [pound]24,000.

So much for sisterhood. In a country where [pound]3,000 amounts to many people's life savings, the promised "empowerment" tends more toward "impoverishment." For eight people to receive the promised [pound]24,000, the setup's structure requires 64 new investors, who in turn will need 512 new investors, who in turn will need... you get the idea. Still, Women Empowering Women (WEW), which originated in America--where it has since been outlawed in many states--and swept Britain this spring, has drawn in thousands of women, some of whom have lost all their savings or gone into debt to participate. In London pubs and living rooms, mobile- toting women tottering on high heels pore over their heart diagrams. In Glasgow there are tales of women leaving "gifting parties" with bread bags full of cash.

The craze hasn't merely raided a lot of vulnerable people's savings. It has also exposed the growing pains of a country shifting from a welfare state to a free- market system. "WEW is really an extreme example of people's lack of financial education in this country," says Diane Hay, chief executive of ProShare, a group promoting stock investment. "These days people have to be so much more responsible for looking after their own needs. People have got to start learning about money, investments and pyramid selling so they understand it." Though pyramid schemes that trade goods and services are banned in Britain, there are no similar restrictions on schemes that work on the generosity--or stupidity--of friends and acquaintances. Britain's Department of Trade and Industry is desperately searching for a legal loophole to outlaw the scam, hoping it might be banned as a lottery and blocked through gambling legislation. For the time being, the government has had to resort to public warnings. "My message to women who are approached to take part is simple," says Patricia Hewitt, ...