If you're dealing with people who are honest and continue paying then it's not a scam & it works for all involved.

I remember hearing of this long years ago. Never understoond why it seemed to be a good idea.

For instance: I'm building a house. I get my hand and buy a load of bricks. Now I have to wait until my hand comes around again to buy another load of bricks? Then wait for my next hand to buy the mortar and pay a brick layer?

I'll never get my house finished!

Sue

I don't know 9 people who I'd trust holding my money.
Don't like the concept. Too many ways for things to go wrong. I'd worry constantly. Don't need the stress.

There have been so many news stories about people in trustworthy positions who embezzle from Little League, PTA, charities, etc. I wouldn't put a penny into this deal.

It's simple to have a certain amount taken from your checking account weekly or monthly and have it automatically put into a savings account. No cash changes hands and it's secure.

I would never do this as there is no way of policing this. No way to force someone to continue paying into the pot who has walked away. And too much temptation for people in these hard times. Be smart and trust yourself to save your own money. Learn some personal discipline along the way.

sheilajoyce I thought about that before I joined in and was mainly concerned that I did not know all the people involved. So it is a case of going by faith and hoping that they all pay. I did it once before in the eighties and it went smoothly but we're living in a different time now where everyone is for themselves.

My payout is early so if others drop out and it falls apart I'll at least have my portion back. It's a reasonable amount so hopefully everyone will keep on top of it.

Sounds like a ponzi scheme to me

How many people instead of getting a "hand" just get a finger?

Doesn't make any sense to me....

I'd rather manage my own money AND make a bit of interest along with it.

What IS the advantage?

Seems to me the only advantage to the ones paying into it is the fun of the gamble and the fun of getting your money back. Can't see any other advantage to it. The advantage to the one receiving the money is 10 weeks of interest and something to dip into if they need it.

I guess for the people who can't get a bank account it's a way to have their money held so they don't spend it. And I assume this is operated on a handshake and a kiss and no paperwork at all and no bonding or insuring the person holding the funds. I can't imagine 10 people paying $50k-$100k each just forking over the money to just get it back at the end! But there are some crazy people out there!

Essentially it's a prepaid loan. You make your payments and then get your "loan" at the end of the payments instead of up front. I guess it could be considered a two-way loan, prepaid on the one side and the receiver is getting loaned the money and they make a balloon payment at the end.

I imagine nobody that gets involved in these schemes has considered the repercussions of death or disability of the person holding the money. Since it probably is undocumented, that money is effectively theirs. If they die, it'll become part of their estate and if they name a beneficiary on the bank account it'll go to them without going through probate in my state. Without paperwork, trying to sue the estate would be difficult and if proven could conceivably wind up with only a partial payment if funds aren't available. If they become incapacitated a guardian or conservator will take control and unless they're aware of it, wouldn't be likely to pay it, at least not very promptly.

I think there's a lot more fun ways to gamble than this.

Oh, forgot to say that it's less like a Christmas Club than it resembles layaway. You make you payments until it's paid in full then you get your item. Instead of being a jacket, bicycle or whatever, it's simply the cash.

Cynic, it actually used to be called a Christmas Club years ago and I guess it was a way to save for Christmas.

You could be right about the bank account situation, but every scope of people have done it. One Aunt has done it for years and she's hardly destitute - so I put it down to her enjoying meeting once a week at the church to pay.

I'm sure those who participate know not to put in funds they can't afford. Trust me, if it was a scheme or scam they would have long been shut down, just like they did with the pyramid schemes. They had no problem arresting those organizers. Maybe it's worked here because there's nowhere to run.

I guess someone can call dog droppings "jelly donuts" but the name of something can be misleading. All Christmas Clubs around here were handled through banks, earned interest and were insured. This definitely is not common in this region.

And of course it's a scheme ("A systematic plan of action") by definition. I don't suggest it's necessarily a scam by design, but I do suggest it's a dangerous thing to do the way it's been described so far, for the above reasons and more. It certainly would be interesting to see the reaction if someone were to die holding upward of a million dollars. Or if a spouse should file for divorce and lock up the funds claiming 50% of it. What about someone who owes child support, back taxes or the like?

I understand how people ship their cars overseas, and send a check with it, turn their bank accounts over to Nigerian "Generals" and other deals. People too often don't think things through.

I think I'd stuff a mattress first! Although with my fortune, maybe I'd stuff a pillow?? :)

Ha, I guess there's a lot of things out there that can be described as a scheme, so you're right.

I think I have my answer now. Thank you.

Zee--you don't really believe that 'if it were illegal it would have been shut down' do you? There are plenty of people participating right now, in illegal pyramid schemes. There are plenty of people who gamble illegally, there are people--lots right in your neighborhood, I'd be willing to bet--who are buying and using illegal drugs, there are all sorts of illegal activities out there that are too small or too 'quiet' to escape legal consequences. Or that just haven't been shut down yet.

I honestly don't know if these schemes are legal or not--but I do know that just the fact of their existance DOES NOT insure legality.

And put the legality question aside--there's absolutely no protection. No FDIC insurance, no accountant overseeing the books, no guarantee that the money will be returned as it's supposed to be. And for the kind of risk involved, there should be SOME profit to the participants, not just the return of exactly what they put in.

You will seriously do yourself a favor if you take out a separate bank account and just put your own $50 in it weekly. If you can't trust yourself to do that, then you probably won't follow through with this plan anyway, right? Why would you put the good of others above your own finanicial health?

I see what you're saying Azzalea, but what's funny is that they have a policeman guarding the gate at the church every week when the ladies go to pay. Like I said it's a small group of us doing it and if it fails, then I'll never do it again. The organizer is quite proficient and I don't think the participants want to hear the wrath of her tongue if they don't pink up. No, I doubt if a lawyer would even waste their time if someone wanted representation after not being paid. The authorities are pretty astute on stopping questionable dealings because we're an offshore banking country.

Actually, after going over what cynic said, he may be right about the Christmas clubs, and I think these 'modern' day ones are a spinoff of them. I remember when I was a little girl, people lining up outside the buildings around Christmas time to receive their payouts. And I hate to admit but there have been locals who have sent their money to the Nigerians. Not sure if they ever participated in club hands though. If I ever find out who one is, I'll ask out of curiosity's sake. :~)

Christmas clubs were run by banks. The money was deposited in the state and federal regulated bank.

Big difference between a Christmas club and what you call a club hand.

I wouldn't touch it.

I don't understand what appeals to you here. Heck, you could put $50 into a coffee can every two weeks then act thrilled when you open it a year later to find...the $1300 you put in there! Even that makes more sense than putting it into a pot with however-many others.

(Do you get a receipt? From whom?)

Monica, I'll ask my mom more to see if she remembers. I was too young to care about those things.

lol chisue at the tin can opening. It'll be done by online banking so that will be the receipt. Guess the attraction is the expectation when the time comes, but different reasons for different people. I just know they've been popular since I can remember.

I think it's the old "gotta have a little push behind you to do it" idea! Friend of mine and I used to walk together early every morning. If I didn't get up I knew she'd be in my driveway in the cold waiting on me. If she didn't show up she'd think the same thing about me. One year we did not miss ONE day walking - no matter what the weather was or what we each had going on in our lives.

You can say that you'll put $50 in a coffee can every month. How many months are you gonna find some reason NOT to do it!? If you know that the money has to be paid that's a different thing.

I think among a group of close friends it would be a fun thing to try. I agree - don't select an amount that would be devastating to you if you lost it.

Tell us some of your experiences, please.

I imagine the club hands idea is helpful and fun or people wouldn't continue to do it.

Thanks for bringing up the topic, zeetera - I had never heard of it.

I haven't red all the responses but isn't that what the book "Joy Luck Club" was about?

I never heard of Americns doing it (from Chicago)

Des ya ya, that's true too. Because I was thinking of booking a cruise when my turn came, and would I put money aside every month for that? Probably not. Most likely I'd book the airfare/cruise on my credit card and then take my time to pay it off.

I'm going to look up that book Minnie. If I remember I'll let you know how it goes in April (or remind me).

To me, it sounds like something fun that some good friends might get started on for the main purpose as Des arc ya ya says. I certainly wouldn't think that a bunch of people who don't know each other well or trust each other would get involved. I don't think it's a serious enough thing to bash this much. Now if someone wants to do it with a large group or otherwise, that's up to them and let the chips fall where they may.

I'm not saying that I'd be interested, but I could see a group doing it for the fun of it and the "savings support". If someone doesn't hold up their end of the bargain, all money gets refunded by the "holder". I sure wouldn't want to be that person and known as that person by my friends. That alone would keep people contributing, I think.

In fact, seems that I've heard of a variation on this, where a group of friends each contributes a certain dollar amount on a weekly basis and then once every month or so goes out for an evening, dinner, or whatever on that money. Sure, it opens things up to problems (someone orders an expensive dinner vs someone else ordering a salad), but those things need to be ground rules at the beginning.

Again, I don't think I'd be interested, but not because I'd be afraid of any of my friends shafting me. This "club hands" thing just sounds like one more way for people to try to have a fun way to save.

minnie -- I think these were called 'tongs', which as I recall raised a pool of funds from which a member could get a loan. They were common among Chinese-Americans -- perhaps because some banks refused to lend to them. Interest was paid to investors and charged for loans. It's also a way of keeping the money circulating within the community.

If you have your bank set up an automatic withdrawal of the $50 into a savings account, you will never have that little worry that all of this could end up as a case before Judge Judy.

Maybe it is the word "club" that is enticing. In grade school I wanted to be in girl scouts, rainbow girls, and DEB CLUB(whatever that was, I did not get invited) because that was where my peers did their socializing. It carries over to sororities and fraternities and country clubs etc. And even in senior years I am a member of several groups not necessarily called clubs. I am able to see certain groups playing the club hands game for the socialization reason as well as the payoff.

Yeah suzieque, thats right, no need to bash over something so simple. Wanna go on the cruise too? IÂll put in another hand for you (giggle).

Well at least it livened up the board some although it did nothing to help the negativity that seems to surround this place lately.

" it did nothing to help the negativity that seems to surround this place lately. "
That's absurd. You brought up the subject and it's being discussed. Would you be happier if everyone said "what a marvelous idea" and then when you lose your money you'd come back here and ask why someone didn't warn you?
I give up.

Considering that Zee's question was "Have you heard of this before?" and not "Do you consider this risky or a scam?", I would say that she is correct in her summary.

She really wasn't asking if YOU (a general you, anyone) would do it or not, just wondering if it was done over here in the States, either now or in the past. At least, that's what I think.

Here we go again...

I just picture the 'old' board saying something like, "Gee Zee, want us to take up a collection for when you lose your money?"

"New" board - over analyzing. I'm a grown woman and capable of making decisions and I thought I had addressed most of what was mentioned beforehand. I know the risks, and I know what can go wrong. Maybe it wasn't clear in my comments.

And I don't think my comment was absurd. I wasn't referring to only this thread.

And I forgot to add that in 1945 the 4th, 5th, and 6th grade girls in our neighborhood had a club with dues set as 5 cents each per month. Our treasurer moved with her family to Minnesota taking our monay. Are you reading this Myrna N. ? How much interest has accumulated on the $1 to $2 ? The members are still living and could use thier payout hand (with or without interest). Remember Sue, Pat, Mary Jane, and Betty?

So, the only acceptable responses would have been "Yes, I've heard of it before." or "No, I've never heard of it before."?
Wow....

From some members, well, yah, lol.

No, some posts gave me food for thought and will definitely stop me from doing it again with larger sums of money, especially those mentioning the legal side of it. But for now I'm comfortable with what I'm doing.

And who knows, this thread might prevent others (not necessarily members here) from entering something that is similar.

I've never heard of club hands before. I have friends that I would trust completely, but I think I will do what I do now...have a certain amount taken from my checking account each month and put into my savings account.

It's not realistic to think that one can bring up a subject and expect feedback to fall within a narrow range only. The KT hasn't operated like that in the time I've been around. If it was ever like that, it's long over. Besides, there's nothing wrong with discussion. And that's what happens in in real life anyway.. at least by my observation.

I wouldn't get involved in something like that. At best, people do what they're supposed to do and you end up with nothing more than you could have gotten by paying yourself the same amount. It's not worth me losing any money for that, because there isn't enough benefit to make it worthwhile, in my opinion anyway. I don't see any fun in it myself, but if others do, more power to them.

No, I have never heard of it done like that. But I am going to risk the possible snarky comment from someone and comment that the same thing could be accomplished by having a certain amount taken out of your pay every pay period and direct deposited in a special account, like a Chrismas club. And you wouldn't be risking a crook taking off with the money.

LOL LOL LOL
At first glance I thought zeetera's post re "old boards and new boards" said old BROADS and new BROADS. Since I had posted I was wondering which I was.

Hope this is not a double post - one went missing.

I have a question..

What if someone decides they no longer want to, or are unable to afford to contribute (say, job loss or untoward expenses), & they've already "won" their $500? How is that deficit made up? Seems there would perhaps be a short-fall for the remaining participants?

Personally, I would rather just get together with a group & gamble 25 cent pots on cards, dominoes, etc. And any "excess" of my money stays in the bank or is invested.

I have heard of this. The Hispanics at work do this. At one time, there were probably about 40 to 50 people in it. I think it would be a little fun to do. I am not sure of the amount they put in each week. Of course, with the people in this, most of them are related in one way or another, so the money coming up missing probably wouldn't be an issue for them. They seem to enjoy it. And that payout after that many people have donated? Wow! :)

... most of them are related in one way or another, so the money coming up missing probably wouldn't be an issue for them.

Oh, yeah? Have you read the "Family Feud" thread,,,, where old photos have 2 sisters @ each other's throats? LOL When it comes to money,,,, then we're talking SERIOUS! LOL

No I have never heard of it and I can see both sides. I personally would not due it, for personal reasons. Could be fun but then I just don't trust people like I use to.
Enjoy and take care.

Had I heard of this before reading this thread? No.

But I'm glad you raised the topic and educated me.

It just amazes me that in this economy, some folks want to have fun with saving. The process of saving isn't fun; it's hard work. I cannot imagine any "average person" not losing money recently in this economy, between 401Ks losing value and interest rates varying, and not wanting to handle what they have in the safest way possible.

I work hard for my money. No way would I trust "friends," because I know what it's like when a friend ceases being a friend.

Heck, I don't even like going in with co-workers on lottery tickets (a few folks used to do it when the pot was huge).

I don't think the idea is to forego all other methods of saving; of course not. I contribute the maximum to my 401k, have IRAs, and other savings methods; those come first. To me, as I mentioned, I think that this might add just a bit of social fun. If a group of my friends asked me if I wanted to join them in putting $5 or $10 in a pool every week and then we'd all go out and blow it every other month, how isn't that fun? If someone is a bad apple, certainly that'd be known before long and that person is out. Ground rules and peer pressure. I certainly wouldn't contribute $500. I'm talking about "entertainment money" or "fun funds". I know that the scenario I mentioned is different from the original that zee did, but I'm not talking about gobs of money and I'm all for adding a little social fun to things. And it would ensure that my social group got together regularly and we all had that to look forward to.

Zee, sure, sign me up for the cruise! :-)

Must be a very local thing. I have Googled and searched Wikipedia for the term....and not a single hit.

Haven't heard of it, but after you said My payout is early so if others drop out and it falls apart I'll at least have my portion back. I would never do it. My friends would get their money and then come up with excuses why they couldn't pay the next month or just quietly drop out. The last payout would be lucky to get $50 back! lol

If people dropped out it could be like a Ponzi scam. The early bird gets the worm and the rest get... nothing! I had a friend who got sucked into one of those just a couple years ago... she lost about $6000. She tried to get me involved in it, but I did the research and told her before she even put her money in that it was a Ponzi scam. The greed was just too great for her though.

I am in a Christmas club through the bank, that works well for me and I know my money is safe.

I get it....nobody is holding any money.

Each week, say 10 people in the club hand over, say $50 to a single member, each week, a different member gets all the money.

The first person, "in line" so to speak, is the real winner. That person receives basically, an interest free loan of $450, to be paid back in the next 9 weeks.
The real loser is the last person in line. That person(if everyone stays in after they have collected) gets their money back, but has lost the use of(or interest on) that money for 9 weeks.

My interest in this will not go away.

Does the payout start immediately to the one who drew the first hand, and all the money taken in the first time is used?

Or does everyone participating have to put in once a week for 10 weeks (ie building up a pot) until the 1st payout is made?

We live in a different world now than we used to. People simply do not trust other people like our parents and grandparents did.

Sounds like a neat tradition that has carried on for many years and must bring back lots of memories for people like your aunt.

If only the world was as simple now as it used to be...

I can see this being a system used by some folks in an earlier, simpler time when it was difficult to find money for some "mad" project ... or to get some major task (buy a wagon, renovate a kitchen, etc.) taken care of that one didn't need to do at a specific time.

I see it as there being no large pot of money.

Each week (month?), 10 people put in $50.00 (or whatever agreed amount) each, and one person gets the full amount, using it for a task that they've wanted to do for a time but couldn't afford, or collect enough money to do.

Whether they put names into a hat, and draw one out to decide who gets the first pot, they would have some pattern in how to distribute it.

Next week/month, everyone puts in their $50.00, and another person gets it, whether by picking one of the rest of the names out of a hat, or according to the pre-determined pattern, or by whatever means of deciding.

Next week/month, everyone gathers and contributes their $50.00 each, and a third person gets it.

As such plans began in an earlier time, when people in a community knew one another well and there was little moving around, it would be among a group of long-term friends ... and a person who had a reputation for scamming wouldn't be invited in, in the first place.

After ten weeks/months, everyone gets the payout one time.

I think that the term would more likely be at least a month, for gathering those $50.00 bundles would be a substantial task, and would take a while to accomplish ... especially when multiplied by ten, in uninterrupted sequence.

It's a forced saving plan.

Sort of like Weight Watchers, I think - a lot more difficult to quit if you're in a group, where you'd be embarrassed to default, more possibility of success than if you've simply agreed with yourself, with no outside "police" method to keep you honest, or continuing to participate.

What's your success rate at keeping your New Year's resolutions??

As for putting the $500.00 on the credit card ... are you going to be ready to come up with the full $500. by next month?

If not ... it's going to cost you a pretty penny, if you let much of the debt run for ten periods!

If you're willing to postpone your benefit for 10 weeks/months, and have the discipline to make the contribution each week, use the bank account ... but the amount of "extra" that the bank offers may buy an all-day sucker ... but maybe not ...

... and how long did that "all-day" sucker last, can you recall?

Hey - here's an idea ...

... how be you start your own bank?

Get the gov't. to support you with a major loan ... at no interest ... and lend the money out, at a substantial interest rate ...

... and a substantial fee if the borrower gets his payment in one day late, etc.

You know the game.

On the other hand ...

... hasn't one of the major problems of our economy been in recent times that we tried to run before we knew how to walk?

And the whole buying-thing-before-we-had-the-money got us into a bucket of trouble!

It looks as though the leaders of the Big Banks, having claimed to have paid back all of the gov't. bail-out ...

... ???????????????????????? ...............

... now feel that they're justified in paying themselves those huge year-end bonuses!!!!!!

As some have said ...

... they just don't get it.

Trouble is - the rest of us just don't get it.

Gov't.'s been bailing out major coporations for years.

Socialism for those well-connected (or "too big to fail") ...

... private enterprise for the rest of us (the little guys).

Seems to me that for most of us, if we'd darn near run our company into the ground ...

... we'd be out on the street, looking for a job (with no letter of reference from former employer).

New meaning of "BBB" (in additon to "Better Business Bureau") - how about "Beaastly Bankrupt Bankers"??!!

Have yourselves a great (and prosperous) New Year, O.K.?

ole joyful