Two years after popular ponzi scheme, Mavrodi Mundial Moneybox (MMM) crashed throwing many investors in Nigeria into sorrow and regrets, another one has zoomed into the country. It is called Loom.
Loom is a Whatsapp based ponzi scheme where investors are paid according to how they are able refer more investor. It has been reported in several countries including UK, New Zealand and Australia, with names such as ‘loom circle’, ‘fractal mandala’ and ‘blessing loom’. In Nigeria, it is called Loom Money.
How Loom Money Nigeria works
- You are invited, usually by a friend or relative, to join a Whatsapp group chat
- Then you are asked to ‘invest’ N1,000 or N13,000 with a promise that you will make eight times the amount back once you recruit
- After you have paid your money, you are asked to invite your own family and friends to join the system.
- There are four levels in Loom Money – Purple, Blue, Orange and Red
- Each time 8 people join the loom, the person in the center (Red) will get target amount and leave.
- The loom will then splits into two groups. The top half and the bottom half become the new looms and everyone moves into the next level (Purple Level – into Blue Level – Into Orange Level) and the cycle begins again.
- 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 cash out.
- The scheme of promises staggering returns of N8,000 for paying N1,000 and as much as N104,000 for paying N13,000
A lot of people familiar with the disastrious ending of MMM are advising Nigerians to steer clear of the doom that looms with Loom. However, many expressed confidence that they can make some quick bucks before Loom suffers the fate of MMM and similar schemes that have come and gone in the past.
Below is a positive investor who shared a testimony from an unverified Twitter handle.
In May 2017, the annual report of the Nigeria Electronic Fraud Forum (NeFF), revealed that Nigerians lost about N11.9 billion to MMM. It indicated that Nigerians invested over N28.7 billion in the scheme between June and December 2016.
The report also showed that the N28.7 billion was money that passed through the NIBSS, involving only 14 banks that are currently on the NIBSS industry Anti-fraud System, HEINDALL, an indication that the aggregate amount Nigerians invested in the MMM and the loss could be much higher than the above figures.
Loom, going by reports from the UK and Australia, might end up being a scam. According to New Zealand’s Newshub, unlike a pyramid, the ‘loom’ sits in a circle and every time a new person is recruited, others are pushed closer to the centre of the circle where they’re promised a pay out. However, if people are unable to find investors and move closer to the centre of the circle, the last people to invest lose their money.
In 2016, the scheme was shut down in the US and some of the operators were rounded up.
In December 2016, a victim of the scam, American Blessing Ellyse wrote on Facebook: “I just found out that this was a scam and I immediately tried to leave and get my refund in the group and the leader told me I “didn’t deserve my money back” and she was going to replace my spot with someone else that I paid for.”
Another victim, Tangela Wiggins wrote: “I think people are putting themselves in the center and a bunch of fake names throughout and leaving a few slots open on blue. I think thats how I got suckered out. Soon as the one last blue slot was paid why did all activity cease and the person disappeared.”