Loom Money Nigeria is a peer to peer, pyramid scheme program that follows the traditional MMM pyramid system.
How did Loom Money Ponzi start, how does it work?The scheme was first reported in the UK. Then it went viral in Australia, then social media platforms and now it is in Nigeria.
How it works is simple:
- First step: 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 Nigeria – 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 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’.
- Loom Money Nigeria promises a staggering easy cash reward of N8,000 for paying N1,000; N104,000 if you pay N13,000
Please note that Loom Money is a pyramid scheme and pyramid schemes are not sustainable and are often illegal.
Here is proof:
- Typically in a pyramid scheme, you pay to join.
- The scheme relies on you then recruiting other people to join up and to part with their money as well.
- For everyone in the scheme to make a profit, though, there needs to be an endless supply of new members.
- In reality, the number of people willing to join the scheme, and ultimately the amount of money coming into the scheme, will dry up very quickly.
- For every person to eventually make the kind of money, Loom is promising, each Whatsapp group needs to always keep on growing with new members.
- For the first person to be paid, he/she needs 8 people
- For those 8 people to be paid, the Whatsapp group needs 8 x 8 = 64 new people
- For these 64 new people to get paid, the Whatsapp group needs 64 x 8 = 512 new people
- For these 512 people to get paid, the Whatsapp group needs 4,096 new people
- For these 4,096 members to get completely paid, the Whatsapp group needs 32,768 new members.
- You can continue the calculation.
- Every ponzi scheme will certainly get to a point where there’s no new investors and no new people coming into it and once that happens, the system will crash.