What are pyramid schemes and how to distinguish them from Legitimate Profitable companies.

What are pyramid schemes and how to distinguish them from Legitimate Profitable companies.

 

In the context of every economic crisis, a pyramid always develops. It is strengthened by the situation, unemployment and the general climate, which prevails and finally ends in a tragedy for many! Read in detail before you meet someone " successful " with the fantastic trick ... Unfortunately the state always reacts in the end....

The first Ponzi pyramid
Charles Ponzi was an American con artist of Italian origin. In June 1919 he managed to convince some to trust him with their money in the form of an investment, on the condition that he would return it to them in 45-90 days plus 50%.
To promote this scheme, he created a company, the "Securities Exchange Company". Ponzi indeed in the early days paid every last dollar that he had promised. Naturally, this news of quick and easy money spread like wildfire. By February 1920, Ponzi had managed to raise the then-huge sum of $5,000. In March of the same year, he had reached $420,000 and from July, he started counting millions.
The "recipe" of his success was based on something very simple... With the money of the last in the series of "investors" he paid the first and so on. However, at the same time, the first "research" publications of the press about the phenomenon began Ponzi that will later lead to the official investigation by the state. The "investors" then start to panic. They are all rushing to get their money. Ponzi, trying to maintain his credibility, pays 2 million dollars within 3 days to the "investors" who lined the streets, outside the offices of his company. Quite a few, seeing that the Ponzi still pays without a problem, change their minds and do not take their money.

How a ponzi scheme works

The Ponzi scheme finally collapsed in August, and Ponzi himself was arrested, convicted and imprisoned. In total, through his fraud, he collected approximately $10 million from nearly 17,000 "investors" who saw their fortunes evaporate.
Since then, Ponzi schemes have taken various forms and found the most favorable terrain on the internet through the so-called HYIP (High Yield Investment Programs), or in Greek, " High Yield Investment Programs ".
The way HYIPs work is identical to that of the Ponzi "company", only that now higher "returns" are "offered" (even over 1000%) and for much less days (even hours). Deposits and "payments" are made quickly and automatically via the Internet. In addition, the "investor" earns a commission if he succeeds in enrolling other members in the program.
Although many know that HYIPs are "pyramids", they nevertheless participate , hoping that they will be among the first to enter the "program" and the manager will not soon "disappear" with their own money. However, there are also the unsuspecting who believe they have found the solution for easy money. HYIPs are the definition of an online pyramid schemeand the "Trojan Horse" of fraudsters who will disappear sooner or later with the money of the "investors".

Beware of Ponzi schemes everywhere, and due to the plausibility of the initial transactions they always look like a huge investment opportunity that pays. 

Another variant of HYIPs are the so-called Autosurfs programs that require a "subscription" (there are also "free" ones, but they are also a scam). In these programs, the user deposits an amount with the prospect of getting it back with an increase soon, just like in HYIPs. Only here, the user will have to "work" a little. So it watches a certain number of ads every day. He thus has the illusion that he is "sweating" to make his profit. Of course the result is the same as HYIPs. Sooner or later the owners of Autosurfs, "take down" their websites and disappear with whatever money they managed to collect.
One Autosurf that made waves in 2005-2006 was Charis F. Johnson's 12DailyPro in the US. Within 9 months and through the Autosurf she had created, she had collected and transferred to her personal bank account, about 500 million dollars ("investors" money, of course), while the total amount traded through 12DailyPro is estimated at about 2 billion dollars.
Another well-known form of pyramid scheme is the well-known MLM . Although here too we cannot talk about 100% fraud, nevertheless the apparently legitimate way MLMs work betrays exploitation several times.

Pyramid Schemes, Multi-Level Marketing, and Ponzi Schemes

What is a "pyramid"?
A pyramid scheme (or pyramid scheme, consumer networking business, multi-level marketing business, network marketing business) is a fraudulent money-making scheme that requires an endless stream of recruited members to succeed. participants
a) give money to those who recruited them and
b) recruit new members to get money from them.
The whole scam is covered up with a "business opportunity" from a "large multinational" which is never named and states that it just wants to promote some products and nothing else (they claim it is neither a pitch nor telemarketing). The amounts promised by this opportunity are suspicious in themselves.

A pyramid is so called because the whole system is depicted as a three-dimensional triangle. If a pyramid started with one man at the top with just 10 people below him (called downlines), and 100 below them, and 1000 below them, etc. the pyramid would employ all the people on earth in only 10 layers with just one con man at the top.
A diagram would help us see this:

1
10
100
1,000
10,000
100,000
1,000,000
10,000,000
100,000,000
1,000,000,000
10,000,000,000

Features we look for when we want to work with a company as investors or sellers:

•  The company does NOT offer you EASY MONEY with little or no work without setting selection criteria - conditions - requirements - and provides FREE training to its sales associates (ie you)
•  The company has at our disposal (PUBLISHED) the Balance Sheets of the last four years.
• The headquarters of the company must exist on a physical map with real building  facilities with secretariat support and After Sale Service. 
• The company must have a specific product or service for sale.
• Instead of the above (specific product or service) he sells easy riches he does NOT make us
• Instead of the above (specific product or service) selling secret recipes for success does NOT make us
• The specific product or service that the company is selling must exist and the company's revenue must come from it and not from member seller subscriptions.
• If the company asks for large monthly subscriptions from its sellers (us) to begin with then we are NOT the employees of this company but the customers, I work = I work = I get paid
• If a company focuses on registering (members-subscribers-sellers-customers) who will become rich and does not focus on promoting a specific product or service, it does NOT make us.
• The company we work with should have an integrated management system, (ISO, HASP, etc.) and the product or service we sell should  satisfy  us  and the customers  we address.
• HUMAN Despite this, many pyramid schemes manage to market themselves as online MLM companies (MLM Simulators) and deceive  prospective partners-clients. 

I am giving you a draft form that you can send to the company you intend to work with as a seller

I GIVE YOU A DRAFT FORM YOU CAN SEND  IN COMPANY WITH WHICH WILL BE LIKE TO COOPERATE AS SELLERS

PLEASE COMPLETE ONE OF THE BELOW CHARACTERISTICS DOES YOUR COMPANY HAVE
N/A	Characteristics of the Company	YES (Justify.)	NO (Justify.)
1	The company does NOT offer me EASY MONEY with little or no work without setting selection criteria - conditions - requirements - and provides FREE training to its sales associates (ie me)
2	The company has at our disposal ( PUBLISHED ) the Balance Sheets of the last four years.
3	The headquarters of the company exists on a physical map with real building facilities with a support secretariat and After Sale Service.
4	The company has a specific product or service for sale .
5	Instead of the above (specific product or service) NOT selling get-rich-quick or how- to-get-rich?
6	Instead of the above (specific product or service) NOT selling secret recipes for success ?
7	The specific product or service that the company is selling is real and the company's revenue comes from it and not from member seller subscriptions.
8	If the company does NOT initially ask for large monthly subscriptions from its sellers (us) and a BIG registration amount if it does, please specify exactly how much it is? (e.g. registration 100 EURO Subscription/Month 20 EURO)		eg registration 100 EURO Subscription/Month 20 EURO
9	If a company does NOT focus on signing up (members-subscribers-sellers-customers) who will become rich but focuses on promoting a specific product or service.
10	The company we work with has an integrated management system (e.g. ISO, HASP, etc.) and the product or service we sell qualitatively satisfies us and the customers we address.

Caution !!! Many scammers promise super profits for Super Profits online but the old adage "Wherever you hear many cherries keep a small basket" applies to all of them. Do your own market research, talk to dealers, consumers, experts before investing time and money. Read and agree to the Terms of Use of the Website, the information published concerns links to books and Websites that exist on the internet, we are not responsible, for more information, please contact the relevant authorities, and the authors of the books and articles. And especially in serious matters, get direct instructions from the authority or the author of the article, we as a blog bear no responsibility except for therepublishingof each article. In any case, before you decide to try any proposed method, it is absolutely safe to first contact an expert on the subject, eg Accountant, Economist, Lawyer, Taxman, etc. who will advise you appropriately.

Bonus 

Scam victim issues warning after losing $750,000 of life savings | A Current Affair

Reblog : https://learn7money.blogspot.com/2014/11/blog-post.html