Pyramid scams thriving in SA - IOL.
Pyramid schemes are often disguised as a quick way to make money, with zero risk. They usually rely on you paying to join, then persuading other people to sign up and pay too. They’re asked to do the same thing, and the chain keeps going. But schemes like this are unsustainable and often illegal, and you could end up losing hundreds of pounds.
A pyramid scheme can be a dangerous investment for everyone involved. Here are a few tips on how to spot a pyramid scheme so you don't lose all your money.
When a pyramid scheme collapses, the people on the bottom get crushed. Those who buy in near the end, who can't find any more people to recruit, lose there money. More on this in a moment, but there is a reason that pyramid schemes (unlike legit MLM's where the product and business opportunities are decoupled) are illegal.
Pyramid scheme promoters may go to great lengths to make the program look like a business, such as a legitimate multi-level marketing (MLM) program. But the fraudsters use money paid by new recruits to pay off earlier stage investors (usually recruits as well). At some point, the schemes get too big, the promoter cannot raise enough money from.
A key feature of a pyramid scheme is its dependence on the recruitment of new members, rather than the sale of a product or service or any investment, to generate money. There may be a product, but.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products.As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
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