Work Scams: Difference between revisions
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→Pyramid schemes
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==Pyramid schemes== | ==Pyramid schemes== | ||
''"Pyramid schemes"'' aim for quick profits by selling the right to recruit other people to the scheme. In a pyramid scheme, you are asked to pay money to become a "distributor" of a product or service. Typically you are invited to attend a presentation about a business opportunity. Usually you are pressured to pay ("invest") a large amount to become a "distributor" | ''"Pyramid schemes"'' aim for quick profits by selling the right to recruit other people to the scheme. In a pyramid scheme, you are asked to pay money to become a "distributor" of a product or service. Typically you are invited to attend a presentation about a business opportunity. Usually you are pressured to pay ("invest") a large amount to become a "distributor." You then recruit a number of other distributors. Each of those distributors is supposed to recruit the same number of distributors, and so on. | ||
===How to spot a pyramid scheme=== | ===How to spot a pyramid scheme=== | ||
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The focus is on profits you can make by sales to new recruits who buy the products in <span class="noglossary">order</span> to participate in the scheme. There is more emphasis on recruiting than on selling the products or service. | The focus is on profits you can make by sales to new recruits who buy the products in <span class="noglossary">order</span> to participate in the scheme. There is more emphasis on recruiting than on selling the products or service. | ||
Pyramid schemes are confusing. They look a lot like "multi-level marketing" | Pyramid schemes are confusing. They look a lot like "multi-level marketing," which is legal in Canada. Under "multi-level marketing" people sell consumer products, usually in customers' homes. The products are supplied by a multi-level marketing company. You can obtain information about a multi-level marketing company from the Competition Bureau: 1-800-348-5358. | ||
While multi-level marking focuses on selling products or services, the pyramid scheme focuses on recruiting more people. | While multi-level marking focuses on selling products or services, the pyramid scheme focuses on recruiting more people. | ||