New 'Loom' pyramid scheme targeting New Zealand youth

A new scam is sweeping the internet - but this time it's targeting the younger generation through social media.

The 'Loom' scheme promises participants that if they buy in with $300 they can make $2400 back. You recruit other people to join you in the 'Loom', which pushes you closer to the centre where you receive your pay-out.

However Netsafe CEO Martin Cocker warns it's a pyramid scheme repackaged for the youth.

"The way a pyramid scheme works is you get recruited and you pay money," he told Newshub. "As long as people continue to get recruited you continue to make money."

But when people stop signing up, those last to join get left out of pocket.

Cocker says it's one of the first scams referred to Netsafe that's spread through social media.

"The working theory is it's targeting younger people, who might not recognise it as a pyramid scheme," he told Newshub.

"Any scam targeting people through social media is effective, because as you receive contacts from people you know, you lower your guard."

And Cocker has advice on what to do if someone comes across the scam.

"Any time you receive unsolicited offers through any form of communication you should do independent research on it," he told Newshub.

"If they handed over the money recently they can contact their bank and see if they can reverse it. Realistically it depends on how long it's been."

He also advises reporting it to the social media platform.