Loom Money Nigeria Review What You Should Know About Loom Ponzi Scheme

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Loom Money Nigeria Review: What You Should Know About Loom Ponzi Scheme

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Loom Money Nigeria Review: What You Should Know About Loom Ponzi Scheme

Barely a few weeks after it took over the social media, targeting young Nigerians to participate in a pyramid scheme, Loom, a Ponzi scheme has slowed down, as fewer people now reportedly invest in it.

Probably garnering lessons from the bitter experience millions of Nigerians had when another Ponzi scheme, MMM, crashed in 2020, various Loom groups have become inactive lately.

Like every Ponzi scheme, Loom was actually expected to last for a short time.

Some Nigerians have started complaining of the slow pace at which the scheme is going.

Nigerians Share Experiences

“The progress is not encouraging at all, once I cash out in this round, I won’t put my money again,” said Rose, a phone outlet attendant, whom this reporter had earlier interviewed.

Rose said, “For the past one week, no new person has joined the group.”

“People are afraid it might crash soon, so once they collect their, nobody markets for the group again.”

According to her, she has “cashed-out” N88,000 so far with the N11,000 she ‘invested.’ She said she put in N2000 three times to get N16,000 each and also invested N1000 in five places to get N8000 each.

Femi Smart, another investor, said, “Loom is a teamwork, if everybody is working, we will all get our money and if we don’t invite people, then the scheme will go off”.

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Mr Smart, who also confirmed the slow pace of the scheme said, “everyone is being careful to invest because of what happened with MMM.”

Rabi Yusuf, a hairstylist, said she believes she has lost her money as she has not been able to convince anyone to join her group.

“I paid 2k into someone’s account since last week, I have not heard from her since I am not on WhatsApp. Any time I call, she will say I should look for somebody to join the group so I can get my money fast.”

Ms Yusuf said she would not mind having her capital back without gain.

Government’s strident plea

The Securities and Exchange Commission (SEC), just as it did during the inglorious MMM era, had warned Nigerians against Loom Ponzi scheme saying, it is ‘a looming danger’.

According to the Acting Director-General of the SEC, Mary Uduk, an inter-agency committee, Financial Services Regulation Coordinating Committee (FSRCC) is collaborating with security agencies to track the group and shut it down.

“We, therefore, wish to notify the investing public that the operation of this investment scheme has no tangible business model, hence it’s a Ponzi scheme, where returns are paid from other peoples’ invested sums. Also, its operation is not registered by the Commission,” she said.

It is not clear what progress the commission has made ‘in tracking the masterminds of the scheme.’

SEC: Loom is a ponzi scheme

The Securities and Exchange Commission (SEC) yesterday warned Nigerians against the activities of some fraudsters running an online investment scheme tagged ‘Loom Money Nigeria’.

It said Loom Money Nigeria is taking over the social media by targeting young people to participate in a pyramid scheme.

SEC Acting Director-General Mary Uduk issued the warning during a press conference by the Minister of Finance in Abuja.

Represented by Acting Executive Commissioner (Operations) at SEC, Mr. Isyaku Tilde, she said the fraudsters carry out their illegitimate business on social media platforms, such as Facebook and WhatsApp, luring young Nigerians to invest as low as N1000 and N13,000 and get as much as eight times the value of their investments in 48 hours.

Uduk said the venture had no tangible business model, describing it as a Ponzi scheme, where returns would be paid from other people’s invested funds.

“We are aware of the activities of an online investment scheme tagged Loom Money Nigeria. The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp to lure the investing public to participate by joining various Loom Whatsapp groups to invest as low N1000 and N13,000 and get as much as eight times the value of the investment in 48 hours.

“Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and Whatsapp. If it were a local Ponzi scheme with known offices, it would be very easy for the Commission to seal their offices and freeze their accounts.

“We, therefore, wish to notify the investing public that the operation of this investment scheme has no tangible business model, hence it’s a Ponzi scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission.”

Uduk advised the general public to distance themselves from the scheme, adding, “Please note that anyone that subscribes to this illegal activity does so at their own risk.”

She also assured that an inter-agency committee, Financial Services Regulation Coordinating Committee (FSRCC) is working on the issue while collaborating with security agencies to shut them down.

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

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