When you started working with a company you found online, you thought it was a multilevel marketing (MLM) program. The people at the top of the MLM program make the most money, but you’re also able to bring in an income by selling items for the business.
For your program, all you had to do was to get more people to sign up. As a “recruiter,” you were encouraged to get as many people to join for $25 as possible. The only problem was that there was nothing of value for them available once they signed up. You may be part of a pyramid scam.
A pyramid scam is different from multilevel marketing, because an MLM has a hierarchical commission scheme. When you sell products through an MLM, you make money for each sale you do. In pyramid scams, you are only paid for new enrollments.
The biggest sign that you’re part of a pyramid scam is that there is no inventory to buy or sell. Consumers get nothing when they sign up unless they get more people to sign up, which in turn brings them in a commission for each new person who joins.
What should you do if you’re accused of running or being a part of a pyramid scheme?
If you’re accused of running or being part of a pyramid scheme, you should take steps to protect your interests right away. You may have cost people money and could be accused of playing a role in criminal activity. Your attorney can be there to protect you and will help you build a defense that helps minimize the penalties that you face.
