smartconsumer: Avoiding Pyramid Schemes - Do

Avoiding Pyramid Schemes

{What to Know} {What to Do}


How can I avoid a pyramid scheme?

If you are asked to join a group that promises you the chance to make money by recruiting new members:

  • Do an internet search with the name of the group and the words “review,” “scam,” or “complaint”

  • Ask the person recruiting you:

    • How many people have you recruited?

    • How much money did you make last year?

    • How much money did you make from selling a product and how much money was from recruiting new members or salespeople?

    • If the group sells a product, can I make money selling the product? Or, will I only make money by recruiting more salespeople?

What if I already joined a group that I think is a pyramid scheme?

Do not recruit other people to join the group. Pyramid schemes are against the law. It is illegal for you to recruit new members.

Report the group to the Department of Consumer Protection and the Federal Trade Commission.


Department of Consumer Protection

Federal Trade Commission (FTC)

Content Last Modified on 2/7/2013 1:17:22 PM