By: Erin Duffy

Pyramid Schemes

How does the scam work?

A pyramid scheme is an illegal form of multilevel marketing. In this scam, your ability to earn profits is based on the number of new participants you recruit, instead of the amount of products or services you sell.

This scam works by having one manager or boss, and they hire people to work for them to pay off profits. And those people hire other people to work for them. And it just keeps going but all goes back to the main boss. Therefore the name "pyramid".

Who does the scam target?

The scam mostly target's people who have been in the pyramid scheme for longer amounts of time. These scams rely on the income from new participants in order to pay "fake" profits.

Who will be hurt?

More than likely either the people who are getting scammed will get hurt. As they will lose large amounts of money. And the people who started the scam could get hurt because if they were to get caught scamming, they could get in serious trouble. although this scheme is very common and hard to catch.

What is economic impact?

The economic impact is that hundreds of thousands of people are losing their money to multiple business scams.

What makes it believable?

Many major companies use this type of method to make their business expand. But when they do it, they aren't scamming people. They aren't taking people's money.

Do you think the average person will fall for this scam?

I think more than likely, the average person would fall for this scam. There are so many types of pyramid scams in this world. And it is so common that it is really hard to know if it is a scam or not.

What does this scam rely on to be successful?

This scam relies on being greedy. Many people in this scam have to be greedy with the money they are taking. As they are almost stealing from people and not giving it to anyone else.

What emotion does this scam rely on?

This scam requires the emotion of greed and selfishness. If you can easily take money from someone, and not care about what you have done to them, you could be set for this job.