Types of Pyramid Schemes
Affinity Group Schemes
Multi-Level Marketing/Network Marketing Schemes
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The Result of Pyramid Schemes
- The scale of harm is enormous, with millions of people affected and billions of dollars stolen.
- The weak and the vulnerable are set upon with trickery, loopholes in laws and psychological manipulation. A growing proportion of victims are in Third World countries where poverty, desperation or naive hope are in abundance while experience with fraud is minimal.
- The disguises, rationalizations and defenses have a similar ring. Perpetrators claim they are uplifting people, setting them free, creating new opportunity, and teaching them a new and better way to live and prosper.
- As in all such abuses of the past, huge amounts of money are spread to peddle influence, stave off regulation, and maintain the false portrayal of legitimacy. Critics are vilified and threatened with lawsuits as "anti-business" and "losers."
- The element of the pyramid scheme that has the most in common with past abuses is its appeal to economic justification. Deceptive practices which take money from millions of unwitting people and enrich a small group of promoters and perpetrators are defended as "legitimate business," helping to build the economy, employ people, and provide economic opportunity.
We invite you to join Pyramid Scheme Alert and to become involved. As in earlier movement to end economic abuses, success comes from a groundswell of public action. We cannot wait for government agencies and regulators to lead. We must lead the regulators.