Pyramid Schemes And MLM Scams

Pyramid Schemes exist online as well as offline. They come in various and creative forms and vary from loans, pharmacy and cosmetic products to insurance policies. Actually the variations are endless, but the general idea is to make you invest and then pursue other investors. This is in your interest, since for everyone you recruited you get a percentage of his investment and for everyone your new recruiter referred you also (can) get percentage. That means the higher in the scheme you are and the more investors you referrer, more money you make, but the higher amounts are cashed in only by those few on the top, while you and the other investors do all the work. Not a question of if, but when, the scheme collapses because it has run out of new investors. Or the fraudster closed his “shop”. Almost all participants never earn a profit, while many suffer huge financial loss. Only the top of the scheme makes money, that is, in the loss of all the others.

The image below is representing pyramid scheme owner as the all seeing eye in the top and sheeps as investors.

Pyramid schemes are deceptive practices which promote themselves as legitimate businesses. Taking money from thousands or even millions, they only enrich a small group of people who started the scam. Often also denying the fact they operate as a pyramid scheme with a masquerade, fraudsters claim to create new opportunities and uplift people. Results can be devastating with huge financial losses taken from people who fell prey to the scam with trickery, psychological manipulation or law loopholes. Always check the company background if investing huge amounts of money, don’t thrust the nice sales person nor be excited on large potential return on investment. Usually, it only exists in your imagination, not in your wallet.

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19 thoughts on “Pyramid Schemes And MLM Scams”

  1. I love the graphic, depicting the people as sheep.

    Too many sheeple have that herd mentality and believe the mlm hype, hoping to get rich quick, when they are more likely to end up as losers.

  2. Yeah like any of the following….

    Amway, Quickstar, and any number of Telco LD Re-Sellers. Watched a friend of mine lose everything trying to get to the next level, where he was sure that the real easy street profits were waiting for him.

  3. The problem is too many people want to work for someone else and not themselves. People must branch out themselves and find areas to make money in that other people don’t think about. Creativity is the source of evolution of man. And when they make a lot of it they better do something fucking useful with it instead of buying a bunch of shit they don’t need!

  4. Watch out for travel scams. World Ventures in particular claims not to be a pyramid, they offer a ‘binary compensation’ plan. Their so called ‘travel agents’ are focused more on recruiting more agents while using their website as a mask to not make this organization appear to be a pyramid scheme. The compensation will most likely not make up for the time, money and effort spent on attempting to make any profit.

  5. Yeah, I attended a World Ventures convention, just to speculate what they were about. I still can’t say whether they’re a legitimate multi-level-market or a well disguised pyramid scheme. They have however evaded the law for 4 years assuming of course they are corrupt, not to mention how they do sell vacations, so they do invest from clients and not just recruits… I don’t know, it’s all suspicious but I really can’t say if they are or not.

    – “Nice usage of the all seeing eye of Osiris/Horus since the Illuminati are said to be one of the biggest world monopolisers in the corporate gang industry.”

  6. WorldVentures profits off of their admitted 70% failure rate. Their high pressure sales tactics are used to intimidate people into making a rash decision.

    Slides such as “Momentum” are displayed and verbal misrepresentations are made regarding the status of the company and the immediate potential earnings…

    Other sales tactics such as the slide dipicting “YOU” out to the left and “BOB” in your place in the pyramid therefore, “BOB” is going to get all the profits “YOU” missed out on because you didn’t sign right then and there- is another example of misleading the prospect…

    Only handing the recruitee a 2 page contract (and in some cases only 1 of the 2 pages) and verbally telling the recruitees “It’s just a standard contract”. Yet, the 2 page contract contains stipulations that the recruitee agrees to abide by a Detailed Compensation Plan and Policies & Procedures, neither of which were provided to recruitee to read/review, nor were those agreements even verbally disclosed…

    Utilizing misleading sales techniques from companies the FTC shut down for deceptive practices, i.e. “MOMENTUM”… (Trek Alliance used the same tactic)

    Omitting and deceiving the public of the involvement WV executives truly had with “companies with less than stellar reputations”… Marc Accetta’s true involvement with Equinox and Trek Alliance

    Training new reps to use deceptive tactics when inviting prospects to meetings “Be in a hurry”, “Keep from explaining”…

    I personally witnessed a WV Representative state they are claiming certain tax deductions, in an attempt to lead prospective recruitees into believing they too could get said tax deductions by being a WV rep, when in fact those particular deductions he stated he was claiming are not allowable AT ALL per IRS regulations (confirmed by my attorney)…

    I also personally received an email from a WorldVentures rep stating she had “gotten all her money back” that she originally invested in becoming a WV rep through WV profits. Further investigation revealed she actually had a several hundred dollar loss…

    In my world, these tactics are unethical, and in some cases – even illegal. Preying on people’s emotions, exploiting their trust, and sending them away with a financial loss and a sense of shame through a feeling of failure.

    Couple that with the high unemployment rate right now, a perfect breeding ground for more victims, victims desperate and willing to accept just about anything they are told just so for a glimpse of hope that they can provide for their family.

  7. I too have gone to a quick start, home party and a meeting. My boyfriends friend said this is the greatest thing so we went. By the end of the meeting they had their laptop open for us to sign up. I wasn’t having anything to do with this. I pulled different things up on the internet showing him and his recruiters what was there. They had an answer for everything. I don’t believe in the invite, be in a hurry and don’t tell them anything about it..just get them there. I would never do anything like that to any of my friends. I believe honest is best and I don’t see it from WV. These people prey on anybody and at this time with economy so bad people are desperate and grasping at straws. My boyfriend got his son to sign up and paid his $350, got his brother to sign up that is in financial ruins right now and just signed up a friend of his that has recently lost her home and gave her $360 to sign up. He has lost over $1100 so far and who knows home much more he is going to loose. This ruined our relationship, we are no longer together over this WV. They talk about spending more time with family and friends and that is so far from the truth. They take all of your time by pushing and pushing you to get people to come to their meetings where they make you feel like it’s a no brainer and you should get sign up. If you don’t sign up or ask questions that they don’t like they don’t want anything to do with you. My advise to anyone thinking about joining WV is DON’T..OK maybe if both people in a relationship would like to be involved and you don’t mind rejection and loosing your money…go for it! If it looks like a pig, snorts like a pig, what do you think it is? PLEASE SAVE YOUR RELATIONSHIPS AND DON’T DO IT!!!

  8. Lisa Kudo’s for you for all of the information you have provided. I am having a real problem with World Ventures and feel frustrated and hopeless. The illustration on this page says it all. My boyfriend signed on with WV back in May. His friends invited us to a meeting and had their laptop right there for us to sign up, very pushy. I didn’t care for the presentation and could see right through it. There is the 4 step invite this is a way to trick your guest into coming to one of the meetings so they can try and hook you. Don’t tell your friend anything, be in a hurry, pick them up and just get them there and the presenters will hook them. I just went to a meeting where they said that the rep is just a professional inviter. WOW…nothing about travel. The friends were not happy because wasn’t on board and didn’t sign up, I also had pulled information off of the internet and they basically said that the information was stupid and not true. If you aren’t on board with these people you can kiss the relationships good bye. He signed up and proceeded to sign up his son, footed the $350 for him to sign up then signed up his brother that is having major financial difficulties himself right now. He has also gone to the fast start meetings. I feel they are just pep rallies to keep them excited and these also cost money. He just recently signed up one of his friends that has also just lost her home and footed the $360 for her to join. WV reps say they spend more time with family and friends and that is entirely untrue. The expect you to go to meeting after meeting trying to bring people to sign up and keep you excited about WV. There are all weekend motivational meetings and trainings that also cost money and take you away from friends and family. In the last meeting they said that you wouldn’t make it unless you went to the “acceleration” and that also is a cost and only in 3 states. Thus far my boyfriend is out over $1100 and still spending on this venture. Unfortunately we are not together any longer because of WV. He is a business owner and business is not good at this time because of the economy and he feels this is his ticket to a future. I feel WV gives people false hopes and dreams and destroys relationships. I you are thinking about joining WV please take a good hard look at it. PLEASE SAVE YOUR $$$ AND YOUR RELATIONSHIPS!!!!

    Lisa I would really love to be able to talk with you regarding WV.

  9. Thanks for the web sites Lisa. It’s all very interesting to me. I just wish I could them to understand this isn’t a promising future. If you have anything else on them could you please post it. Thanks!

  10. These are BARGAIN DreamTrips???

    DreamTrip 01-06-10 4 nts. Riu Vallarta $798 p/couple
    GOGO WWV 01-06-10 4 ntis. Riu Vallarta $744 p/couple

    Dream Trip 02-19-10 7 nts. Riu Palace Las Americas $2,798
    GOGO WWV 02-19-10 7 nts. Riu Palace Las Americas $2,282

    DreamTrip 03-27-10 4 nts. Riu Guanacaste $1,398
    GOGO WWV 03-31-10 4 nts. Riu Guanacaste $1,168

    Prices quoted on 11-07-09, prices per couple, same dates, same room category, includes all taxes and transfers.

    DreamTips Membership for ONE YEAR – $199 first year plus $24.95 per month, total $498.40.

    DreamTrip Price on 3 trips above: $4,994

    GOGO WWV Price on 3 trips above: $4,194*

    LOSS with the DreamsTrips Packages and Membership for FIRST year = $1,298.40.

    LOSS without DT membership = $800.

    *Consumer prices shown (retail). The travel agent/seller would make between 13 to 16% commission on the sale.

  11. Can someone provide a new link to the Texas Secretary of State document or email it to me?

    I have a family member rapped up in this and was asked to attend a meeting this weekend in Houston. It’s quite sad to seem someone with stars in their eyes thinking this is legitimate. They even encouraged people in debt to just use their credit cards because “you can’t afford not to” join.

    I am trying to get a strong case together to get her out of this, but right now the “enthusiasm” and pep-rally tactics along with myopia have her mesmerized and there’s no telling her it’s no good.

    Thanks for everything you’ve posted here.

  12. I have a friend really wrapped up in this right now and I’m glad I found this website – there’s a lot of good information on why NOT to be involved with WorldVentures. He has already gotten 3 of my friends to hand over 350 dollars and get nothing in return, and he tries to trick me into going to these meetings. I think 60 Minutes or Dateline need to do a show on this to open everyone’s eyes to the scam it really is, here’s some info the FTC has published on these scams and who to contact about it.

  13. Ridiculous article, to be honest, referring to pyramid schemes, where you have no real products to sell! The whole business world is growing towards direct selling and MLM, so you better get with the program, guys, because one day also you will loose your traditional 9-5 jobs! I’m an MLM pro and doing very well! What’s the difference with the traditional pyramids, where your boss runs out of clients and he gets rich of your hard work. The difference is, that in the traditional way, you don’t make any money, apart from your salary, which is usually not enough to live from, the way you would like to live! Nobody has ever given me an answer to these questions: “What’s the difference between an MLM associate and a traditional customer?” and “What’s wrong with earning more money, than in a traditional job?” and “What’s the difference between a traditional company going bankrupt, because of loss of clients and an MLM company going out of business, because of loss of associates/clients? and “Why is it not a problem for Bill Gates to get filthy rich, but it is for an MLM owner?” You know why these questions are never answered? Because the answer is always “None”. There is only one difference –> with MLM products you are your own boss, so you also have to work hard, to build your netword, instead of sitting on your lazy butts allday, staring at a screen or working your butts off, for a low salary, while your boss is getting rich! As far as I’m concerned, MLM pro’s are the new entrepreneurs and the rest of the crowd are the real sheep!!

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