Watch Out for These Instagram Pyramid Schemes After Your Cash

Loom circles and fractal mandalas are just different names for a scam that's rinsing millennials of their money.
illustrated by James Burgess
Instagram Pyramid Scheme Loom Circle Fractal Mandala

Scrolling through Instagram on her lunch break, Emma* didn’t have to wait too long to be hit with a stream of a bougie home furnishings, aggressively colour-coordinated bedrooms and artfully arranged keys with hashtags like #firsthome, #assets and #blessed.

The 27-year-old Londoner, who works in recruitment, was thinking about her future – but, like many millennials in the UK, felt locked out of home ownership. Despite working full-time, spiralling living costs and stagnant wages has meant saving a significant monthly sum is not viable.


But when a friend described Loom50 – a scheme that promised participants £400 from a £50 investment within three days – it piqued her interest.

“It was all over social media,” Emma says. “There were groups for Loom100 and Loom250 and testimonials from people saying, ‘I’ve made so much money, it’s great.’ I got enticed by the quick turnaround of money. The way I looked at it – and how I justified it to myself – was ‘it’s only £50, if I lose it, it’s fine’.”

Her friend linked her with the admin – but admission to the Whatsapp group, where members were given instructions as to which bank account to deposit the money, rested on Emma recruiting others. Reluctantly, she convinced a friend to give it a go. “He was sceptical. But I repeated the information I was fed about it being legit, so he gave in,” Emma says.

The pair each paid £50 into a bank account – but after two days their eight-member Whatsapp group fell “radio silent” so Emma messaged the admins. “I said, ‘Guys, listen, if nothing’s happening can we give [my friend] his money back?’ I didn’t mind losing my money but I didn’t want to bring someone in, gas him up and have him lose faith in me.”

If this is starting to sound familiar, that’s because there’s a name for these scams. They’re pyramid schemes, also known as circles of trust, blessing circles or Ponzi schemes – the latter being named after the Italian con artist Charles Ponzi, who swindled large sums of cash from people in 1920s America.

Instagram Pyramid Scheme Loom Circle Fractal Mandala

The proliferation of social media has given rise to fraudsters preying on people to invest in dubious get-rich-quick schemes. Chancers promote multi-level investments that claim to offer huge profits for little or no risk. But the initial cash isn’t invested in a valuable product or service.

Instead, it passes up the chain of investors, with the turnover of newcomers ensuring the pyramid remains intact. Like Emma, participants enter an investment chain and, theoretically, members are paid out of joining fees when they exit the circle. The kingpin at the top collects the lion's share of profits – but latecomers to the pyramid often end up with nothing if it fails.

Back in March, hundreds of pyramid schemes accounts appeared and sparked a flurry of interest among Gen Z users on Facebook, Whatsapp and Instagram – the last two being subsidiaries of Facebook. VICE counted as many as 200 money-flipping accounts active on Instagram and more than 5,000 posts were linked to various schemes, with images tagged #blessingloom, #circleoftrust, #fractalmandala and #loomblessing.

Admins sought to drum up interest by posting images and captions like: “Join my loom, you will not look back or regret it”, and “Turn £160 into £1,300 Easiest money you will make [sic]”. Some participants sought to recruit new members with comments such as: “We have a loom going, we’re always cashing out! Lets get this moneys!” Instagram has removed a number of accounts advertising Pyramid Schemes following enquiries from VICE UK.


Copycat scams began to pop up in social media communities in countries including Australia, Nigeria and New Zealand – with local media and law enforcement warning users not to get involved with the craze.

Some fraudsters began DMing people who may have liked photos on other money-flipping accounts in an attempt to recruit them to their investment sites. One man reportedly slid into Instagram message inboxes to recruit users to the ‘Moneygram Flipcash Forum’ – an initiative he claimed could “multiply your money by 4 times in 40 minutes”. The bogus scheme is not affiliated with Moneygram, the US-based money transfer company.

Between January and June 2019, there were 148 reports of identified pyramid schemes, which led to an “estimated cumulative loss of £970,000”, according to Action Fraud, the UK’s national reporting centre for fraud and cybercrime.

Pyramid scheme victims were cheated out of more than £3 million in 2018 – and more than 40 per cent of the 390 cases recorded in the 12 months to December 2018 were linked to social media.

Scammers contacted many of this year’s victims, predominantly aged between 17 and 40, on platforms including WhatsApp, Facebook and Instagram, said Action Fraud. One scheme, known as Fractal Mandala, reportedly asked investors to transfer £160 on the promise a £1,280 return.

Scott McGready, a cybersecurity expert who works with the police, said organised criminals were mostly orchestrating the scams. He told the Times: “The people running about doing the donkey work are often funding serious crime in some way and don’t realise it."


Of course, the concept of money sharing and pyramid schemes is nothing new – in fact studies show it dates back to the 13th century Japan, where it was known as a kou. The practice spread throughout the world and today, money-sharing thrives in the UK among immigrant communities, where they are collectively known as Rotating Savings and Credit Associations (ROSCAs).

In Jamaican circles, it’s known colloquially as a pardner, while the Indian iteration is a chit fund. Over in Brazil and Mexico they are referred to as consórcios and cundinas, respectively. And in my own Ghanaian community we call it susu.

When the first wave of immigrants arrived in Britain more than 60 years ago, money-sharing took off among friends, family and colleagues. Typically, each member paid a fixed sum into a kitty and took turns withdrawing large amounts of cash, which came in handy as banks often refused to lend to them.

ROSCAs encouraged people to save – and granted those without bank accounts access to credit. It’s worth noting that these ventures weren’t regulated like banks, and money tended to lose value in real terms as no interest is added. But what sets these saving circles apart from the social media rackets is trust that your relative or coworker wouldn’t rip you off.

But Action Fraud warns people against considering any type of investment that seems too good to be true. A spokeswoman told VICE UK: “High returns can only be achieved with high risk which includes the risk of losing all of your initial investment. If you have given the fraudsters your bank account details or other personal information there is a chance that you could go on to lose significantly more.


“If you have provided your bank details to anyone you suspect of being a fraudster, alert your bank immediately.”

The topic of young people and money is complicated: the shift from permanent full-time jobs to freelancing and the gig economy; growing student debt and flatlining wages have all contributed to money worries. A 2016 report by the Institute for Fiscal Studies (IFS) revealed that pensioners saw their income grow “three times as fast as the income of young people, which fell seven per cent.

In 2018, Steve Webb, the former UK pensions minister, claimed falling levels of homeownership has meant younger generations will end up having to pay rent in retirement – and could need as much as £445,000 to avoid a slump in living standards.

Kim Stephenson, an occupational psychologist who coaches and researches the way people manage their money, encourages millennials to “ask not what you can do for money, but what money can do for you”.

“Human beings evolved to be ‘cognitively economical’ – or bone idle,” he says. “It’s a survival characteristic. We don’t want to waste [time] so we tend to look for the golden bullet. [Losing] £50 may not be the difference between life and death but for some it can trigger something serious.”

Emma was lucky. She and her friend managed to retrieve their money. “My friend was upset and he said, ‘I knew it was a scam’. When they said the money was gone, well, he’s hella ethnic and said, ‘Hell no, someone’s gonna hear about this’ – so they gave him his money back real quick.


“When the concept first took off on social media, a few people made money. For people our age it was about quick and easy money. But it exploded and got out of control,” she says.

If anybody is tempted by the get-rich scheme on their Insta feed, Emma has a word of warning: “Seriously, don’t do it – it’s like gambling. You might as well go to a casino because your odds will be the same.”

In a statement to VICE, a Facebook company spokesperson said: “Fraudulent activity is not allowed on Instagram. When we catch fraudulent activity we work to counter and prevent it – including removing accounts as we have done in this instance. We regularly monitor for new trends and are always improving our systems to provide a better experience for our community.”

* Name has been changed