A new Ponzi scheme is in Nigeria and growing aggressively via Facebook and WhatsApp. It is called Loom.
What is so interesting is that, Nigerians are subscribing to this Ponzi even after losing millions in the last Ponzi scheme – MMM.
Loom was recently reported as having surfaced again in faraway Australia as a new dangerous money-making scam taking over the internet, targeting young people on social media.
Loom is a peer-to-peer pyramid scheme which involves people being invited to invest as little as N1000, or N2000, or N13,000 and get as much as eight times its value within a short period of time.
The Loom pyramid is grouped into four colour-coded levels – purple, blue, orange and red. Whoever is the first to sign up for the group sits in the red level, which is the central level, and gets the payout when the group fills up.
Two people sit in the orange level, while four investors fill the blue level. The purple level takes new entrants with eight spots open.
Once the eight spots in the purple level are filled, the group splits into top half and bottom half as the investors in the outer levels move into new levels.
The new groups of seven investors each then have to recruit eight new investors to once again break the circles into another two groups.
Investors are typically invited to join a WhatsApp group and advised to get as many other investors as possible because the scheme only works if it keeps a steady stream of new investors to pay earlier investors.
The more people are recruited into the group, the quicker it breaks and the quicker the payouts are to investors. The initial investment is usually paid to the group admin who sits in the red level.
When investors start to dry up, groups will take longer to fill up, and newer recruits will lose their investment without any payouts. This will only be averted if there’s an unending stream of new investors.
All I can say is “Do Not Play”. It is just another Ponzi Scheme. Loom does not operate from any physical office so there is no recourse to anyone or any company when it goes belly up
