The Economic and Organised Crime Office (EOCO) has warned that the Loom money making scheme targetted at young people is a scam.
“It is a scam and the general public is cautioned to desist from investing and patronising the Loom,” the office warned in a statement.
EOCO also warned that “anyone who transacts business with the Loom does it at their own risk.”
The office assured that it will keep an eye on how the get-rich-quick scheme unravels.
“The Economic and Organised Crime Office in line with its mandate to prevent and detect organised crime will continue to monitor developments with online investmetns with the view to ensure that citizens are protected from scammers and fraudsters.”
The pyramid scheme has been appearing in newsfeeds online and circulating on social media.
The scheme has also been described as a “loom circle” or “fractal mandala” or “Loom Money Nigeria” in some other parts of the world.
The scheme asks participants to pay a sum of money up front with the promise of making a return of up to even eight times that amount.
Loom scheme is essentially a pyramid scheme that relies on an individual paying to join in.
The new entrant is then required to recruit other people to join in, who are also required to party with money as well.
For everyone in the scheme to make a profit, there needs to be a constant supply of new members but history has proven that the persons willing to join the scheme and the money they input eventually runs out.
This leaves the members at the bottom of the pyramid making a loss.