The latest social media craze has stimulated many concerns around the legibility of investment schemes as the ‘loom circle’ is making its way around our media platforms, targetting the young demographic of social media users, which has left many participants of this scheme out of pocket.
The idea is that you pay the admin of the circle £160 with the promise of making £1,280 once the circle is full. The circle relies on the participants to recruit other people to fill the circle, in order to move them into the ‘red’ so they can make their money. Once complete, a new circle is made where the process starts again, so the people involved can get their money. For everyone in the scheme to make a profit, there needs to be an endless supply of new members which is unsustainable and often illegal. See the picture below for detailed instructions on how this process works.
Investment schemes are a type of fraud which is prevalent on social media platforms such as Instagram. This scheme has an aim to target a younger and more vulnerable generation that are heavily influenced by people on such platforms. As tempting as this may be, students need to be aware of this scheme because it will leave you out of pocket as the process relies on an infinite number of participants to allow the payment to work but it if the chain doesn’t function, then the promised money of £1,280 won’t be paid and the £160 original investment will be lost.
£160 is a lot of money to be wasting and buying into a scheme that banks have warned these incidents as ‘fraud’.
We advise anyone that has already started this process to acknowledge the risk of this scheme and hopefully those who have read this article and haven’t become a part of this scheme, won’t interfere and invest in this highly unpredictable and dangerous case of investment.
For more information about this case, follow the link to the BBC article where an interview was conducted with Cyber scam expert Scott McGready, and a real-life account of the consequences of this scheme.
Featured image: https://www.consumerreports.org/scams-fraud/cell-phone-account-fraud/