Social media platforms particularly WhatsApp and Twitter have been inundated with conversations about Loom which is a peer-to-peer scheme which involves people being invited to invest as little as GH¢20 with the promise of a return eight times its value within a short period of time.
Links to WhatsApp groups of "Loomers" are being shared across social media and new entrants are encouraged to invest sums ranging from GH¢20 with the assurance that the loss of such a paltry amount would not be fatal.
In some Loom groups monitored by Graphic Online [see below], new entrants are also encouraged to get as many other new investors as possible in order to ensure that the scheme is sustained.
This is because the scheme is likely to fail if new investors do not contribute to paying old ones.
An invite to such a group stressed that it was teamwork and not a scam. "No one is taking your money - we're all bringing people on board to support each other move fast," a welcome message after joining a Loom group read.
An ordinary Loom pyramid is grouped into four colour-coded levels - purple, blue, orange and red. Whoever is the first to sign up for the group sits in the red level, which is the central level, and gets the payout when the group fills up.
Two people sit in the orange level, while four investors fill the blue level. The purple level takes new entrants with eight spots open.
Once the eight spots in the purple level are filled, the group splits into the top half and the bottom half as the investors in the outer levels move into new levels.
The new groups of seven investors each then have to recruit eight new investors to once again break the circles into another two groups.
However, participants are now being arranged in a list according to whoever made payment first.
The quicker people join and make payments to a central mobile money account, the faster the payouts are to investors. The initial investment is usually paid to the group admin who sits at the top of the list.
However, as with any such peer-to-peer investment scheme, new entrants are likely to lose their investments when investors start to dry up and groups take longer to fill up.
Some Loomers who spoke to Graphic Online on condition of anonymity shared similar fears but were confident that they would cash out before any such collapse. Read Full Story