Watch Out For Blessing Loom Scam

The Blessing loom is an online money making scheme that is currently running through social media. This game has been running for a few years despite being called a pyramid scheme by consumer affairs in 2016.

Now during the current Covid madness, it seems that people are promoting this more than usual. Maybe having the economy in lock down, is a good time to push these alternate concepts of money making ideas.

We agree that this does appear to be a pure pyramid scheme. This is the internet version of the classic chain letter scam.

Even though there is absolutely no official information about this system, we’ll do our best to explain how it works in this full review of the Blessing Loom. One of the first things we found was that as recently as April 2020, NBC Connecticut warned that Blessing Loom is a scam.

What Is The Blessing Loom

The Blessing Loom is a pay to play money making game. If you are invited to play, you will no doubt get a version of their ‘pay out diagram’. They obviously think their system resembles a loom. To us it also looks like a pyramid (if viewed from above. Their diagram, and a pyramid are shown below:

The goal of the Blessing Loom game, is to make it to the middle circle, or the top of the pyramid. You start of buying into one of the 8 blue spots at the lowest outer layer. We’ve seen different versions of the game with different entry fees. Usually it’s US $100, but we have seen a version in the UK which was charging GBP 250 to join the outer loom circle.

After you join the loom, you will be invited to join a private chat group for your loom. This will be on your phone through messenger or whatsapp or something similar. In this discussion group, you will no doubt hear lots of standard MLM hype, about how the people are making so much money. They’ll claim that they have already cashed out several times, and this is like the 10th Loom they have participated in… there’s no way to say if any of these claims are true.

Once all 8 spots have been purchased, the loom splits into 2 new games, and you are now on one of the four green spots. 8 new players join, and after a 2nd split, you will be at one of the pink spots. After a third lot of 8 players has been recruited, you will have made it to the central spot.

The rules of the game are simple. You pay for a spot in the outer circle, and all the money goes to the person in the middle. In other words, if you buy a spot for $100, and just wait for the system to split 3 times, you can receive up to $800 when the next round of players joins. Once you’ve made this money, they say, you can play again.

The standard story they’ll tell you, is that if you just find 2 friends then they each find 2 friends, in no time at all, you’ll be making money. They’ll also show you a picture of a ‘populated’ loom, which may look something like this:

If we were to look just at this one diagram, you could get the impression, that there are only 15 spots on the Loom. So it looks like it just takes 14 people to join after you to get your $800 payout. So that’s your money back plus $700 in profit.

The cost of buying into the scheme may differ, but the concept is the same. You start on the outer ring, then once you climb to the center, you can get back 8 times the initial cost. In New Zealand the scam charges $200 to buy in, with the potential to $1,600 back.

If this system worked, then making money might be as simple as ‘signing up a couple of friends’. The problem is, that this just sounds too good to be true, so it probably isn’t.

In reality, reaching the top of the pyramid, or the middle of the Blessing Loom is very difficult. Every time you move up a level, the system splits, so by the time you reach the top, there will be 8 Blessing Looms running in your social network. When you are trying to recruit new members, you’ll be competing with 7 others who probably know a lot of the same people, and between the 8 of you, you’ll need to find 64 new recruits…

Every time the Blessing Loom splits, half the people who were in your group, become your competitors. This is why very few people make money because systems like this reach saturation very quickly. The diagram below shows what your network would like if you made it from the bottom to the top of this pyramid.

Is Blessing Loom An Illegal Pyramid Scam

Based on all the official warnings we have seen, it would appear that Blessing Loom is an illegal pyramid scheme. Having said that, it is one that is particularly hard to shut down. The challenge is that there is no official Blessing Loom company running the system. Each loom is essentially an independent pyramid scheme with just the 15 players in it.

So even though this is a blatant pyramid scheme, authorities would need to shut down each loom, which is very difficult, especially if they keep splitting. The New Zealand Commerce Commission, has advised that anyone caught running such a scheme can be fined. But issuing a fine to one person, and stopping one loom, will not stop the spread of this game.

Should You Join The Blessing Loom

Given that it is illegal in several countries, it’s probably not a good idea. Even if you are one of the very few who make it to the top of the Loom pyramid, then it’s you’d might find yourself in legal trouble. Even if you never get in trouble, and make some money, think about the other costs. If the only way you could make money was if your friends and family lost it, would you want to do it? With the Blessing Loom, that’s exactly what is happening. The only way to make money is to take it from others who are in your Loom.

If you are willing to run a money taking scam, then why not go all in. . The blessing loom is exceptionally easy to manipulate. There’s no need to pay to join an existing loom, when you can just create your own with yourself at the top.

It wouldn’t be very hard to create one with 7 different names that are all really just you. You could illegally start your own loom without paying to join, then find 8 people to fill the outer layer at the bottom of the pyramid. Once the pyramid splits into 2 new looms, 2 of your aliases could then receive even more entry fees, and so on. At $100 per entry, you could end up with $5,600 without putting any money in yourself.

This is where game theory comes into play. Game theory is the economic concept that, if there is a way to take advantage, then someone will do it. This system is so easy to cheat, and is so obviously a scam. The game will attract a lot of people who are willing to cheat the system..

That’s about all we an say about the Blessing Loom, but as always, we’d love to hear what you think in the comments below, especially if you have any stories to share about this system