Nigerian human rights activist, Comrade Deji Adeyanju has petitioned the acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, over a new Ponzi scheme called Loom.
The scheme, which recently started in Nigeria, promises a return of N8,000 for N1,000 and N104,000 for N13,000 in 48 hours.
Loom was first reported in the UK, then by the Australian Broadcasting Corporation as a scam after it had gone viral in Australia.
The first step of the process is being invited to join a WhatsApp group chat, usually by a friend or relative. Then you are asked to ‘invest’ N1,000, N2,000 or N13,000 with a promise that you will make eight times the amount back once you recruit new entrants.
After you have paid in the money, you are asked to invite at least one person to join the system. There are four levels in Loom Nigeria – Purple, Blue, Orange and Red.
Each time eight people join the loom, the person in the centre (Red) will get the target amount and leave the group.
The loom will then split 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 make your chunk of ‘easy money’.
The basics are that you get eight times the amount you “invest.” If you invest N1,000, you get N8,000; if you invest N2,000, you get N16,000; and if you invest N13,000 you will get N104,000.
Unlike MMM, where there is a website and its founder, Sergey Mavrodi, is well known, the promoters of Loom are elusive while the pyramid scheme operates via closed groups mainly on Facebook and Whatsapp.
Recall that the Nigerian Deposit Insurance Corporation (NDIC) reported that three million Nigerians lost N18 billion to Mavrodi Mundial Movement, simply known as MMM when the scheme froze in 2017.
On December 13, shortly after celebrating its first anniversary, MMM Nigeria announced the freezing of all members’ accounts due to what it called “systems overload and the negative attention brought on by the Government and mass media”. This led to widespread panic in the nation and even attempted suicides.
Adeyanju, in his petition made available to The Guardian, said Loom is another means devised by fraudsters to swindle unsuspecting Nigerians through a Ponzi Scheme.
“I am deeply concerned about this dangerous trend that has enveloped the minds of young Nigerians who believe that LOOM is an investment opportunity through which they can make easy money. This new Ponzi scheme is an investment fraud that pays existing investors from new investors which may likely lose their investments if the chain discontinues.
“Consequently, I call on the commission to immediately launch an investigation into this very matter by unmasking the brains behind this new Ponzi Scheme in our various Social media platforms.
“It is pertinent to note that this unrealistic investment opportunity has led many unsuspecting Nigerians into investing their hard-earned money into a scheme that does not guarantee a return for their investment.
“The Commission must as a matter of urgency swing into action and nip this fraudulent scheme in the bud before Nigerians get deeply involved.
“I am equally appealing to the commission to create an awareness campaign to sensitize Nigerians on the risks involved in participating in fraudulent schemes such as this.
“The EFCC must ensure that all perpetrators and originators of this scheme be arrested and brought to justice. If we don’t rid our society of these dangerous schemes that are capable of driving Nigerians into depression as a result of a likely loss of investment.”