THE ECONOMIC and Organized Crime Office (EOCO) has warned the general public against undertaking any financial transaction with Loom Money, a supposed online “susu” investment firm.
There has been a social media storm about Loom since it’s introduction.
But EOCO in a statement dated June 14, 2019 and signed by its Head of Public Affairs, Jacqueline Avotri, revealed that it (EOCO) has for some time now been monitoring the new trend of “susu” investment online called Loom Money”
According to EOCO in the statement, “it (LOOM) is a scam and the general public is cautioned to desist from investing and patronizing the Loom.”
It revealed that “the Loom gets people to recruit other people to invest money, much like a pyramid-selling scheme.”
It explained that “the loom sits in a circle and every time a new person is recruited, others are pushed closer to the centre of the circle where they are promised a payout.”
However, it said “if people are unable to find investors and move closer to the centre of the circle, the last people to invest lose their money.”
“There is no actual product coming from the scheme and is only beneficial for people who get in early because everyone else pays up the chain,” according to the statement.
Whom Does Loom Money Target?
The scheme, the statement indicated, is targeted at the youth who are willing to part away with money on cyberspace.
How Does the Loom Money Work?
DGN Online has gathered that the Loom scheme pyramid level is in four places.
It is represented by colours – Purple, Blue, Orange and Red.
Each time eight people join the group, the person in the centre (usually on the red spot) gets the target amount which is GH¢ 400.00 and after investing GHC50.00 leaves the spot for the next person.
At that point, as revealed through DGN Online’s investigations, the Loom would then be split into 2 groups.
The top half and the bottom half each then becomes new groups and everyone moves into the next level.
That “means those people that were in purple move to blue, those in the blue move to orange, and those in the orange move to red (the final stage and the cashing out stage).”
DGN Online is informed that Loom Money Ghana promises a cash reward of GH¢ 400 for paying GH¢50.00.
Origin
EOCO in its statement revealed that Loom Money was first discovered in United Kingdom and it is now circulating across the globe with different names such as Loom Circle, Fractal Mandala, Blessing Loom and Loom Money Nigeria.
Warnings
The Security and Exchange Commission, the statement recounted, on 11th June, 2019, cautioned the public that Loom is not licensed to operate in the capital market.
The Economic and Organised Crime Office in line with its mandate to prevent and detect organised crime, it said would continue to monitor developments with online investment with the view to ensure that citizens are protected from scammers and fraudsters.
The statement warned that “therefore, anyone who transact business with the Loom does it at their own risk.”
Past Experiences
EOCO has in the past warned the general public to desist from carrying out financial transactions with certain institutions.
The now ‘defunct’ gold collectibles firm, Menzgold Ghana Limited was one of such firms.
Even though EOCO and SEC warned the public severally against transacting with Menzgold Ghana Limited, thousands of Ghanaians stubbornly went ahead to do business with the company.
They ended up having their funds locked up with Menzgold after its closure and have since been battling to retrieve their investments.
Defiance
Surprisingly, some Ghanaian ‘Loomers’ have criticized the Securities and Exchange Commission for warning them against looming.
They have taken to social media to blast the Commission, daring to continue looming.
One Ghanaian ‘loomer’ wrote in defiance to SEC’s warning that “I just cashed out GH¢1600 after investing GH¢200 yesterday, tell me how many people get that salary after a whole month.”
Another wrote “There’s risk involve in doing business, either you loss or u gain…so I’m in.”
