Due to economic hardship and greediness, people are willing to do anything to make money even if it will make others lose theirs. Some people are just naive and ignorant about what they are getting themselves into. There have been a lot of pyramid schemes that emerged in the past which ruined people’s businesses and made them lose their hard earned cash. – LOOM: A Scam That Targets People With Promises of Earning Quick Money
According to the Australian Competition and Consumer Commission (ACCC), it is not only a crime to promote a pyramid scheme but it is also a crime participating in it. Scamwatch has revealed that they had received about 128 complaints of LOOM Scams this year since 4th February recording loses of about $7600 which is equivalent to GH¢40,736.
What is LOOM?
LOOM is a pyramid scheme scam that offers you a chance to join a group, a team or a scheme where you are required to recruit new members to make quick money. The main aim of the scheme is to promote the scheme to lure unsuspecting individuals to join by promising them of earning easy money very quickly. In pyramid schemes like LOOM, the promoter makes claims like “this is not a pyramid scheme”, “this legit”, “this is totally legal” among many others.
This pyramid scheme is mostly spread online through social media networks such as Facebook, Instagram, WhatsApp, Twitter among others. This is why many people do not even get to know they are being scammed their hard earned money. It is obvious that at the end of the day many people will be left hundreds of cedis/dollars out of their savings or pockets once they run out of friends of family and friend to invite.
According to ABC Australia, it was first reported in the United Kingdom and is now circulating on social media around the globe including Australia, where the user is asked to deposit/invest an amount of $300 (an equivalent of GH¢1608) with a lucrative promise that they will make eight times the amount they have invested if the recruit new members.
ACCC had reported that most of the people making reports to them are between the ages 18 and 34. About 60 percent of the people reporting said they were contacted through social media networks and other online forums whiles 5 percent and 34 percent of the reporters were noted to be between the ages of 18-24 and 25-34 respectively.
According to Lincoln Bernstein, from Queensland’s Gold Coast, said he gave up the money after seeing a friend posting about it on Instagram a couple of weeks ago.
“Then I got sent a link to a group WhatsApp chat inviting me to get involved,” Mr Bernstein said.
He revealed that he was invited to the scheme and made to believe that he was going to make money quick, but was yet to see any return.
“You transfer $300 to the person who is in the middle of the loom,” he said.
The scheme is spread through social media platforms, which means many people do not realise they are being scammed.
“If you’re committing to it and then asking your friends and family to do so, it takes away some of the warning signs,” Dr Cross said.
“You have to give out your bank details in order for money to go into an account, and you also send money to someone else’s account.
“That just raises suspicions about money laundering, and around not necessarily knowing who you’re sending money too, or having your bank account details that are out there.”
Dr Cross warned many people would be left hundreds of dollars out of pocket once they ran out of friends to recruit.
“It will certainly get to a point, as many of these schemes do, where there’s no new investors and no new people coming into it and once that happens all of the promised returns never eventuate and it all falls over,” she said.
Participating in this “LooM” pyramid scheme means you are scamming your families and friends of their hard earned money. Think about it, would you like your families and friends to lose their monies because of you. Would like them to face economic hardship because of your actions? You wouldn’t like to do this. Just spread the word and create the awareness of others too.
Hope you enjoyed this article? Thanks for reading. Kindly subscribe to our notifications to get informed about our latest updates as soon as they are published. Don’t forget to share this post. We want to hear from you, kindly leave your comment below.