Primarily a myth of the Christian right in the U.S. during the mid-1980s, fueled in part by psychotherapists with hidden agendas. That didn't stop a large number of people from being charged with various crimes they probably didn't commit. See, for example, the story of Paul Ingram, who was accused of ritual abuse by his daughters; he was eventually pressured (some would say brainwashed) into giving what most believe to this day to be a false confession. He is currently serving a twenty-year sentence.

Carl Sagan, in The Demon-Haunted World, discusses UFO abduction, ritual Satanic abuse, and false memory syndrome.

Note: I am not saying that child abuse does not happen; it does, with alarming frequency. However, I have not heard of a single case where the abuse was part of a satanic or pagan ritual. I have, however, heard of cases where it is part of a `Christian' ritual. This is probably not because of anything particularly nefarious about Christianity, but rather the fact the it is the most common religion in the U.S.

Every religion has its bad apples; unfortunately, when those bad apples fit the stereotype which closed-minded people already have of that religion, things get bad. `Ritual Satanic abuse' became another reason for people to hate witches and other neopagans. As my best friend is a witch, and I have another friend who was abused by her uncle, I feel especially sensitive towards both sides of this issue.

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