Are you unknowingly assisting a pyramid scheme? 

On Behalf of | Aug 30, 2022 | White Collar Crime |

Scams have gone on for thousands of years: Ponzi schemes, phishing, home repair scams, fake business offerings, false arrest warrants, inheritance scams, fabricated money and more. Many people fall into scams, but some people support scams without realizing ever realizing the truth.

Pyramid schemes may be one of history’s most recurring cons– you might say it goes back to the Egyptian era. What is a pyramid scheme? Here’s what you should know:

Trickle-up economics

Pyramid schemes convince people to support a sketchy business model causing people at the top of the pyramid scheme to profit the most. Pyramid schemes start with a few people paying a top member money upfront to support the business model.

People are then given promotion material with the promise of being rewarded by recruiting new members. New members will then pay older members to be involved in the business model. However, as more members join, fewer funds are made, eventually causing the pyramid to collapse. 

There are a few hallmark signs of pyramid schemes:

  • High recruiting requirements
  • Low-value goods or services being sold
  • Promises of high rewards with little effort
  • Promises of easy or passive income
  • Confusing business standards

Many pyramid schemes work on hopes and promises – that with hard work comes great rewards, but only to people who deserve them. Other pyramid schemes involve selling overpriced goods with the promise of being something special that would otherwise be purchasable at stores for a lower price. 

People fall for pyramid schemes all too often and often realize it when it’s too late to avoid legal trouble. If you believe you’re been involved in a pyramid scheme, then you may need to reach out for legal help.


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