Loom Money Nigeria, is a new money-making scam targeting young people to participate in its pyramid scheme.
The trend is taking over social media. The scheme, which is even worse than the collapsed MMM, is luring young Nigerians to invest as low as N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours
According to the US Securities and Exchange Commission, a Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.
“In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business,”the SEC explains.
The Loom Pyramid Scheme is not new to the world. Last month, Daily Mail UK reported that the scheme has resurfaced online all over the world, with different names such as ‘loom circle’, ‘fractal mandala’ and ‘blessing loom’. In Nigeria, its central name is Loom Money Nigeria with individuals creating their own WhatsApp groups such as Preye Loom, Catherine Loom among others.
According to one of the WhatsApp groups, the Loom scheme pyramid level is in four places and represented by colours – Purple, Blue, Orange and Red.
“Each time 8 people join the group, the person in the centre (usually on the red spot) gets the target amount which is N16,000 and after investing N2,000 leaves the spot for the next person.
“The Loom would then be split into 2 groups, the top half and the bottom half each becomes new groups and everyone moves into the next level.
“Which means those people that were in purple move to blue, those in the blue move to orange, and those in the orange move to red (the final stage and the cashing out stage).“
In a Facebook post the promoter explained that “the more people you manage to add to the circle, the quicker the movement of it, and thus, the easier it will be for you to make your money.”
“Loom Money Nigeria promises a staggering easy cash reward of N104,000 for paying N13,000 or N2,000 for N16,000,” the Facebook post reads with a link to a closed WhatsApp group.
Investigations across WhatsApp platforms show that one of the promoters of the scheme on Facebook opened his social media account late 2018 and turned a Facebook page opened for 2019 Nigerian Election into a Ponzi scheme.