The infamous "Loom Scheme" has resurfaced on social media amidst COVID-19 pandemic

Headlines 20/04/2020

Remember when your most dodgy mates tried to rope you in to the "Loom Scheme?" Well now it's trying to make a comeback on social media amidst a global pandemic, with a number of posts circulating the internet showing the infamous ponzi-scheme is back.

For those who don't know how it works, the illegal scheme involves people recruiting new members to pay an entry fee to join some sort of group. The founder of the group (or person who replaces them thereafter) then takes the cash earned from those fees and bails, while the newer members then have to find fresh recruits to continue paying entry fees.

Eventually the scheme falls apart when one runs out of people who don't ask questions, such as, "Why do I have to pay an entry fee?" or "What is this group even for?"

So if you are late to joining the scheme, chances are you're gonna lose money. Alternatively, an early-joiner might get a lucky payout albeit through illegal means.

The scheme made waves in Aotearoa in early 2019, but eventually fell apart when more people became aware of the illegal nature it all.

But social media sites have seen a spike in Loom Scheme related content, with one unfortunate lady in Utah falling for the scheme and losing out on $100.

Complex reported that "A woman who spoke to local media outlet 2News, revealed that she paid $100 to get into one of these groups because it had the promise of an $800 payout if she could get others to join. She then began messaging her friends on social media to get them to buy in as well.

Eventually, she said she just walked away and accepted the (relatively tiny) financial loss. While that woman used Venmo, others have been similarly scammed using PayPal, social media, or even the old school way (in person)."

Naturally, many people took to social media in an attempt to warn others of the scheme:

So if you see this floating around again just remember to steer clear whanau!