Special Report: Another ponzi scheme emerges few years after Nigerians lost billions to MMM
Barely two years after the devastating experience Nigerians suffered from the collapse of a popular ponzi scheme, Mavrodi Mundial Moneybox (MMM), another related scheme is gradually gaining ground in the country, Newsclickng.com can authoritatively report.
Recall that when MMM crashed in Nigeria in December 2016, many who lost their investments in the scheme vowed never to get involved in any form of Ponzi again.
However, following the launch of the latest ponzi scheme in town called Loom Money Nigeria, many have thrown caution to the wind as they rush to partake and even market the scheme.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Ponzi schemes typically deceives victims into believing that profits are coming from product sales or other means, as they remain unaware that other investors are the source of funds.
What is Loom?
According to findings by Newsclickng.com, Loom Money Nigeria is the latest ponzi scheme in the country. Like MMM, Loom also operates a peer-to-peer pyramid method of rewarding participants.
How it works
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 payout.
There are four main levels in Loom which are: Purple, Blue, Orange, and Red. Immediately, eight persons joined the programme, the person in Red (centre) qualifies to get his target amount and and can leave. Afterwards, the Loom will split into top half and bottom half as the circle begins again.
Basically, the higher number of people you add to the Loom, the quicker the movement for you to withdraw your initial investment.
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.
Below are the step-by-step procedures of Loom Money;
- You are invited/lured to join by either friends, relatives, colleagues, etc.
- You are then asked to invest either N1,000 or N13,000, with promises that you will earn eight times the initial amount when your circle is complete.
- After “investing”, you are then required to invite more people.
- You must be aware of the four steps earlier mentioned.
- The more people you add, the sooner you get to “cash out”.
Is it real?
While people who are into this Ponzi scheme have proofs to show as evidence of payments to lure new people into this platform, it is pertinent to note that Loom Money Nigeria is not a sustainable investment, neither is it legal.
The Impending Doom
Practically, you pay to get involved in a Ponzi scheme. Loom Money Nigeria relies on “you” to recruit other people to join up and to part with their money just as you did.
In order for everyone in the scheme to make profits, the supply of new members is expected to be unending. Each Whatsapp group or other social media platforms is expected to be growing with new members to make the kind of moneyLoom Money Nigeria is promising.
Therefore, should some members fail to keep up with the commitments expected of them to get their expected returns, the amount of money coming into the scheme will ultimately dry up; causing people to lose their initial investments just as it was the case with MMM.
A fresh scamming method
Loom Money Nigeria is dangerous and the end result is expected to be tragic. This is because by inviting your friends and family members to join the platform in order for you to cash out, you are basically scamming them.
Essentially, you’re scamming your family and friends because it is your immediate circle that you are introducing the Ponzi scheme to — it’s basically like transferring money around to different people until the people at the bottom of the chain eventually gets screwed.
