OnlyCritiques.com Review:

A Pyramid Scheme is an illegitimate Multi Level Marketing (MLM) system that does not usually have a product to sell, but functions based on how many people are involved in the “business.” It is important to know the difference between a legal MLM and a pyramid scheme. In the former program, people are sold a real product or service, which they resell under certain terms to make money for themselves. In the latter, people are recruited into the business who make money simply by getting more people involved who further widen the network, while selling a poor product, or sometimes not selling a product at all.

Any investment that offers commission to recruit new distributors must be screened well because 99% of the times it would be fraudulent. The sting is that, for the people involved, to make more money the recruiting must go on forever, which is not possible. Confidence in the scheme is gradually eroded and many people are left with heavy losses.

An example of such a scam would be John Doe’s idea to send an e-mail to about 100 e-mail addresses at random, which states that to make more than $3,000 in less than 2 weeks the individuals who receive the mail must pass on to 100 more people. A survey shows that 5% of those to whom the mail is sent are actually willing to participate. For every participant generated a sum of $1 is credited to the main sender. The senders make money through multiplication of participants from 1 to 5 to 25 to 125 to 625 to 3125, and the total amount made would be $3,905 in less than two weeks.

This scheme is fraudulent because no product or service is being sold, and it needs an exorbitant number of participants, which cannot be assured.

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