What Is A Pyramid Scheme About
make money,  MLM,  Review

What Is A Pyramid Scheme About And How To Recognize It?

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To earn money is a long process and everyone dream to make a significant amount of money in their life. Many companies today are examples of how dreams come true in a legit way; they help you and guide you indirectly on how to work and earn money.

There are many good examples of good companies around which are setting examples as a valid and legit business, but you also find some business which is total scams, like Pyramid Schemes are. They target people to trap them by giving them false information.

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If you get trap in such company, then instead of making money you will lose your entire money by dreaming of making more money. One of the most dangerous schemes which I found is a Pyramid scheme. Lots of people around the world come under such a fraud scheme and lose their money. So they should know what is a pyramid scheme and be alert that no one can fraud them.

At the end of this post, you will find links to my reviews of some dangerous pyramid schemes.

What Is A Pyramid Scheme???

General legit company’s sales their products to customers and earn profit from it. On the other hand, the pyramid scheme company’s sales products which will be undoubtedly overpriced or difficult to sell. They will trap inspiring entrepreneurs and make them fools by involving them in the scheme so that they can enjoy at the top of the pyramid.

How you get trapped: First of all, you have to become a distributor and purchase some amount of products (or buy for services, training, etc.,.) which will be undoubtedly overpriced and without knowing companies’ reality by the trust you invest thousands of dollars.

The Struggle Of Finding Distributors

Once you become a distributor you journey of struggle starts, and you realize it’s tough to sell products as they are overpriced. Or, there can be many other issues because of which you cannot sale your purchased products to others; that means you will lose lots of money in no time.

This Business Is Heartless As It Targets Close Ones

You will also get an idea that it’s not an easy thing to recruit others and sell products. Still, you will be encouraged by the people who recruited you by saying that you can do it as they have done it. So in fear of losing money, they tend to find people whom you know personally like a family member, friends and many more and his heartless scam starts by trapping people whom you know.

Survival Is Not Easy

What Is A Pyramid Scheme About

To survive in pyramid scheme you have to find people under you continuously, and by doing this, you might have to do false things by showing false dreams to people and convince them to join in this scheme.

Pyramid scheme force you to do false things like you tell people they can earn some extra money by doing this, you have to show the company as legit which is actually not, and you know that you are trying to come out of this scam by pulling someone down instead of you.

False information about products and display them as the best in the business.

Why it has been running for so long?

Because the person who you know is doing fraud to you. In a Pyramid scheme, if this technique is not used, then it wouldn’t have got success because no other person from outside can fraud you.

Small profits which you get from pyramid schemes are nothing against the things you invested like your time, your thousands of money, and what you get is few pennies’ in return which will make you happy for some time and keep giving you trust or say fool you for some time. You will be doing marketing, courses, training session and everything but nothing will work.

Pyramid scheme will always show you faces which have earned the highest in the company; they will never reveal how many people have lost their money in it. Actually, most people get failed in a pyramid scheme, and the whole money goes to the top of the pyramid people who brought such schemes.

Why this Ponzi pyramid working from years because no government can stop them, you might hear about tons of complaints, but you won’t get answers for such things from any government of the world.

How Does The Pyramid Scheme Work?

Pyramid Schemes starts from one level and can be expanded to different levels, and it grows more as it goes deeper.

Suppose one person on the top starts his business and he recruits 2 than 10 people under him/her which is the second level all of them will invest a fixed amount of money in becoming a part of the scheme all money of this members will go to the main person with whom we started.

Now second level people have to recruit people under them, and it will be the third level of this scheme. Everyone who gets the share of money at the time of recruitment as a commission. This way the whole process goes on the level to level one under two then three under four like that.

Pyramid scheme
By Security and Exchange commission, U.S. Federal Govt.This vector version by Mysid – Vectorized from Image:PyramidSchemeMS.jpg, and removed one phrase to make less US-centric., Public Domain, https://commons.wikimedia.org/w/index.php?curid=3780400

Recruiters get a profit of all of the money received, minus their initial investment paid to the person who recruited them. Eventually, a big multi-level structure expands into existence with each level having an exponentially higher number of members.

It goes on up to one level and the problem starts when earning is not possible, and no more people join this business or scheme means the base is out and company close at that level.

Let Us See Types of Pyramid Schemes

Most famous Multi-Level Marketing (MLM)
Pyramid Scheme

Many say MLM and pyramid are the same, but it is not. MLM is basically more of a legal way of doing business; yes its process is quite similar to Pyramid as you have to add members under you and sell a product.

Scam Pyramid Scheme VS MLM

The main difference between multi-level marketing and pyramid scheme is that the MLM works on a real product or service wherein Pyramid you are shown only levels and money goes to upper levels as many recruiters come

MLM sell products or services that actually exist and are sold in the consumer marketplace. Where in Pyramid there is only fraud schemes and no products to market – which is against the law is objectionable which is told by federal government agencies.

There are also some similarities in both

  • Big lies are told as you will be a millionaire in a short time.
  • You need to pay before joining in both the schemes and you get no guarantee of your money.
  • Generally, payment is made in cash in these schemes means no proof remains when you want to claim for your money.
  • e alert when you are asked to join the place where you need to bring recruiters in a group which will give you profit means you are entering a Pyramid scheme.

Illegal Gifts Promotions

Many pyramid schemes work on gift giving and all or even on loans in an investment club. It works as you donate a gift to the recruiter and then recruit more people to receive more gifts as investments or gift. All this thing is not right and not even legal so be aware of such things you might get disguise by such things so better be alert to such scams.

Very Famous Ponzi Scheme

Ponzi schemes are scams which show false plans for investment. Yes, they may be little different than the pyramid scheme, but they work on some things; tell people about high returns. To the top of the pyramid people by trapping new investors in the system which operates as a chain scheme which is similar to the pyramid scheme.

Top branch gets a whole cake to eat as money, and the new ones get waste or nothing to eat. So many people are lured into this kind of schemes before also where they get trap in the dream of earning big in short time but at the end lose their money and time in this kind of scams.

According to Wikipedia, all Ponzi schemes have several similar characteristics. They will offer:

  • High investment returns with little or no risk.
  • Overly consistent returns
  • Unregistered investments.
  • Unlicensed sellers. 
  • Secretive or complex strategies.
  • Difficulty receiving payments

A Pyramid Scheme Is Not Legal In The Following Countries

Pyramid schemes are illegal in many countries or regions including Albania, Australia Austria, Belgium, Bahrain, Brazil, Canada , China, Colombia, Denmark, the Dominican Republic, Estonia, Finland, France, Germany, Hong Kong, Hungary, Iceland, India, Iran, the Republic of Ireland, Italy, Japan, Malaysia, Maldives, Mexico, Nepal, the Netherlands, New Zealand, Norway, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, SouthAfrica, Singapore, Spain, Sri-Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, Ukraine, the United Kingdom, and the United States

Famous Scams Of Pyramid Scheme

List of pyramid schemes companies that are dissolved:

  • World global network Burn Lounge (shut down as a pyramid scheme by FTC – Federal Trade Commission in 2012)
  • Equinox International (dissolved in 2001),
  • European Grouping of Marketing professionals /CEDIPAC SA (dissolved in 1995),
  • European Home Retail (dissolved in 2007),
  • Fortune Hi-Tech Marketing (dissolved in 2013),
  • Fund America (bankrupt in 1990),
  • Holiday Magic (dissolved in 1974),
  • Metabolife (dissolved in 2005),
  • BurnLounge, Inc. (2007 sued by the Federal Trade Commission),
  • Vemma Nutrition Company (2015 FTC filed a lawsuit),
  • Sunshine Empire (dissolved in 2009) and many more.

Read about some of the Pyramid Schemes that I reviewed:

My Conclusion About
Pyramid Schemes

Everyone wants to earn money in their life but making money by scamming people is not and good idea to do. So, try to remain safe against such schemes, and there are many other works available to earn money online.

I was scammed for ten years, trying to find a legitimate and honest online business. And I made it three years ago. I find it great free training, where I learn everything about online business and how to make real money.
In the last three years, I left my office job, start working full-time online, pay off all my debts, bought a house and living the life that I always dream of.

Now, I give you an opportunity to start your online business, and finaly start earning big money.


Try to work hard on other things which are not fraud. There is no pyramid in it; you will be your own boss. You don’t have to do scam others, just do proper work and earn money from home or anywhere.

Hello, ladies! I hope you liked this post. I started my online business journey in 2003, worked for others or sign in at wrong programs. A three years ago I started with affiliate marketing, and now I am running my own online business, working from home. So, I can help you to start your own business.

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