Anytime someone joins a program that involves downlines, groups, teams or something similar and there is a membership fee, joining fee, donation, gifting, 1up or 2up or anything similar you are running the risk of being involved in some kind of Ponzi or Pyramid Scheme. Each and every person is to do their own DUE DILIGENCE to see what they are joining. Just because your best friend says will not hold up in court when you face a judge.

Due Diligence is not just checking scams.com or running a business name or owner's name thru a Google search and nothing comes up dirty. You have to look at the program/offer/service and compare it to regulations, government rulings, affiliations, payment processing, product validity and more. Check the whois.net registry for the various registrations the company may have, their contact info and office location(s). Check the company's Terms of Service, Privacy Policy, Conditions and any other guidelines they set BEFORE joining. If they do not disclose this freely without joining then you better run away.

Check with the BBB if they offer business in the US or Canada and any other applicable agencies in any other state. Check for product shipping into your country if tangible product. Check for embargos imposed on certain countries by your country.

Just because a program/business is easy and cheap to join on the internet doesn't mean NOT to treat it like a business. If you were going to pay large sums to open a brick and mortar business you bet your sweet bottom that you would take time to research the deal before you shelled out any money to get involved.

An example could be a Hookah Shop. If your jurisdiction says Hookahs are contraban then it would be a waste to open a shop just to have it shut down for violations. (Hookahs are known as a smoking device used with blended tobaccos and also used by people that smoke illegal substances. So, communities have set rules for businesses whether legal or illegal to sell this item. Again, due diligence.) The same applies on the internet.

Here is a site that defines well about Ponzi, Pyramid and other Fraud Schemes. Please read and be informed.

http://members.impulse.net/~thebob/Pyramid.html

Remember, there is no difference if you make your money from a bad business model or if you sell drugs ... both are illegal.

Kenneth R Sword Jr

Hi Kenneth

Thanks for an interesting and informative post.

The link you sent contains a very clear and easily understandable explanation of what a Pyramid or Poniz scheme.  And also gives a very clear guide to when an mMLM is not an MLM but a pyramid scheme - i.e. when there is no product or product of value. And this could be true of many many so called legitimate MLMs around.

I would like to add one comment. You speak of cheap or free to join schemes.  However, there is also another kind of sophisticated fraudulent programme on the market which benefits from that arguement - and use another sales tactic.  They are very expensive to join and they use this feature to add credibility to their programme.  So my observation is that, the cheap or free aspect is a strong sales point for many pyramid and other fraudulent schemes in internet marketing.  BUT we also have a reverse strategy by others who use a high entrance fee  to "prove" that they are credible and avoid suspicion of fraudulent intent .

 Regretably on the internet, as in life itself - you do not always get what you pay for.   Theonly answer seems to be a lot of very tedious but very necessary due diligence WHATEVER the price.

I would appreciate your comments

Saludos
Jenny

Great information, Ken.  Thankyou so much for caring enoung to share it.

Judy

Great information, Ken.  Thankyou so much for caring enough to share it.

Judy

Hi, Kenneth: Thanks for providing us with such useful, and well researched information! You hit the nail on the head with this one! Seems no matter how often people are warned, they'll still fall for the "get rich quick" scheme. Hope everyone takes the time to read this, thoroughly! Miracles & Blessings, Robin