NEW DELHI: As the world battles the coronavirus pandemic, fraudsters are minting easy money with numerous ‘blessing loom’ scams, where gullible people are being lured with promise of at least eight-fold returns if they pay to enter certain online groups in ‘good faith’ or for ‘counting their blessings’.

At the peak of the COVID-19 crisis, which has left many jobless and a lot others within confines of their homes for ‘work from home’, the lure of making some quick bucks has made a large number of people vulnerable to online frauds and complaints have started pouring in with Indian authorities as well about many getting enticed to such scams, which are like age-old pyramid or ponzi schemes recycled with a ‘blessing’ twist.

Derek Loom, the American citizen widely credited to have started this scam by roping in ‘blessed investors’ through Facebook, got arrested last year itself, but he had already made at least USD 10 million by that time and authorities could not press any tangible charges against him, as per various media reports.

Since then, the scam continues to reverberate across continents from Africa to Americas to Asia and the coronavirus crisis seems to have provided it a fertile ground to grow multi-fold, including in India.

The scam has already gained a multi-national colour, given the online world being its main playground and digital wallets the key instruments for transferring the money, though there are indications about it having moved to the offline space as well with the people from unconnected places also being lured in the name of helping the coronavirus victims and also “earning” some easy money in the process.

The scam typically plays on concepts like ‘good faith’, ‘count your blessings’, ‘contribute for the community’ etc, besides promising some easy money by helping build a ‘shared economy’.

Beyond these ‘blessed’ concepts, the idea is similar to a typical ponzi scheme where every investor or contributor is required to rope in at least eight other investors or contributors to make an exit of at least eight-times of his or her contribution made in the name of the ‘entry fee’, which the main perpetrator Loom had kept at USD 100 but now differs from scheme to scheme.

In India, the ‘initial input’ seems to vary from as low as Rs 100 to as high as Rs one crore, an official said while citing complaints received so far.

In some cases, it is also called ‘blessing loop’ as it involves getting more and more people into a loop being marketed in the name of getting ‘blessed’ for helping others in the time of a pandemic, the official added.

Every passing day, more new concepts are being explored and one of those involve the person at the centre getting at least seven others — in the name of seven basic elements (nature, water, fire, earth, light, darkness and spirit) involved to complete the eight-member look.

Some others focus only on four basic elements — water, earth, air and fire — but such a scheme typically involves a person identified as one of these four basic elements starting the loom (for example, water) by getting at least two others as first level contributors (earth), followed by each of them getting at least two each second-level investors (air) and then four of those getting two each of the last category (fire).

Once this loom gets all 15 members, it splits into two looms with seven members each and the central character being common to both and more contributors get added to make each of them 15-member strong and the process continues.

The model involves the central characters pocketing the maximum money and those roping in the maximum contributors get to become a central character. An ‘investor’ gets an opportunity to exit with the money eight-times his or her own contribution after roping in eight others with similar contributions, or stay put for even higher returns, while the same rule keeps getting applied to all newcomers.

According to authorities, the scam has gone unnoticed for quite some time as such schemes typically generate easy returns for early entrants, but as the scheme keeps getting bigger, it becomes more difficult for people to rope in fresh contributors and therefore there are lesser chances of getting the promised returns.

Eventually, the scheme fails when those entering the last fail to bring in more people into the loom, but their contributions might have already been pocketed by their predecessors.

Several such ‘blessing looms’ are being operated through social media pages and groups, including on Facebook and WhatsApp, while many have now shifted to ‘dark web‘ platforms to avoid scrutiny or surveillance by authorities.

Officials said it is illegal to run these schemes and those behind such activities can face strict penal actions.

Also, many schemes where Indians are getting lured are actually operating from other countries, including some in Nigeria, and therefore probing them would require cross-border coordination and assistance among regulators and enforcement agencies, officials said.

For now, it is also being explored to issue advisories and caution messages to warn people against falling prey to such scams.