"Pyramid Schemes" are nothing more than another MLM scam, where an individual or company is involved in recruiting members. Every member will recruit other members down their line. Then further the down the line members recruit more members. and ultimately this flow chart looks like a pyramid.

Hence it is called a Pyramid Scheme. The new members do the funding to the members above them, and these members in-turn fund the next higher level member above them... and so-on.

Usually the initial members are the basis for funding and the members who form the first line benefit the most, because they will be funded every time the pyramid grows.

The pyramid scheme assures you of guaranteed returns (at first), and people have always dreamed of having the power of people under them. This thought itself will lure them to join this high-powered Scheme.

People find it interesting when the scheme starts, but later on when the truth is revealed, the business almost always collapses and most people lose their entire investment.

The new members, after sometime, realize that this scheme is nothing but fraud, and this is the start of the inevitable collapse. The new recruits usually feel it is better to back out then, and save what money they can. In other words... cut their losses.

The lowest level members are the individuals who suffer the most, and frequently lose every penny they put into this scam.

The other similar kinds of Multilevel Marketing (MLM) are Matrix Schemes, elevator schemes and network marketing, which all work on the basis of constant new recruitments, or else once again, the pyramid will collapse.

Due to this growing trend of MLM, many countries have even incorporated stringent laws to save people from falling into the trap.

U.S citizens may lodge complaints against pyramid schemes with the Federal Trade Commission (FTC), the State's Securities Commission, the US Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), the FBI Internet Fraud Complaint Center, Internal Revenue Service (IRS), or the State's Consumer Affairs office.

Best Wishes,

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