Pyramid Schemes

A quick question: I got a pyramid scheme in my email yesterday. It wasn’t even a subtle one, there was no attempt at all to hide it’s obvious nature. Aside from my amazement that anyone would fall for it (but hey -people STILL play Three Card Monte on the street!), aren’t these things illegal? Maybe I’m wrong, but I was under that impression. Should I notify someone, and if so who? I haven’t actually been scammed, here, myself.

My internet provider is the institution I work for, and I’m sure they wouldn’t really care.

Of course they’re illegal. Just ask Chucky Ponzi.

But don’t you understand? These things are PERFECTLY LEGAL. And they’d be sure to tell you otherwise.

Forward it to the postmaster@ the originating address. AOL users can forward to TOSEMail1 or TOSSpam, depending on whether the chain letter originated with AOL or elsewhere, respectively.

“Age is mind over matter; if you don’t mind, it don’t matter.” -Leroy “Satchel” Paige

I think that they may be legal in some states but not here in NC. Anyone hear of International Heritage Inc.? Stan Van Etten? They sold merchandise - golf clubs, jewelry. They were busted last year here in NC and it forced the whole company to fold. I have heard of some discount phone companies “recruiting”. Another one sells financial advice. Can’t recall either name.

I’m all for free enterprise. “Caviat Emptor” I say. But the truth is, some people are too stupid to live. In their never-ending quest for the “Fountain of Youth”, “Magic Diet Pills” and “Get-Rich-Quick-schemes” these people fall for the smoke & mirrors of these sales pitches instead of reading the print. "Let’s see: I have to pay you to sell your stuff AND recruit people before I can make any money? Whatta bunch of rubes!

“Quoth the Raven, ‘Nevermore.’”
E A Poe

Which raises a question that has occasionally come up in my little brain.
Technically wouldn’t Amway be a pyramid scheme? Their main push seems to be to promote your friends to sell the goods, rather than you selling it yourself.
I’m sure there’s got to be a couple of Amway distributors on this board who can enlighten.

Yeah, I’m too lazy to research it now (heck, maybe ever), but there’s a difference between illegal Ponzi schemes and the like and simply a “pyramid” organization like Amway, where the only way to really make any money is to get other people signed up and working.

Nevertheless, it’s still something to be wary of.

I understand the difference between an illegal pyramid and an organization like Amway is that to be legal, there has to be an actual product being sold. Amway sells stuff, ostensibly to present themselves as legit, but the main idea is still to recruit.

Amway is a sterling example of a bonified, legitimate multi-level marketing, or MLM.
They make money, and their reps make money by selling products and reaping the benefits of the labors of others’ (that they recruited) efforts to sell products.

A dishonest MLM frequently has a “catalog” of items for sale, but the entire thrust of the organization is not to sell product, but to pay the higher ups from the sign-up fees of the lower-downs. This makes such marketing ploys pyramid schemes in that very little, if any product is actually sold, and all of the “profits” come from the (supposedly ever-expanding) base of the pyramid.

I saw an iteration of the math involved, it’s closely akin to the multiplication of bacteria under ideal, unrestrained conditions. If you recruit five of your friends, and they each recruit 5 of their friends, etc, it only takes 64 layers of pyramid before the number of people involved exceeds the number of protons and electrons in the known universe.

Chuck Ponzi was a master of this scam, and people still insist he was legitimate and they wait every day at the mailbox for the big check that never comes.

BTW IIRC a Ponzi scheme is one in which new investors pay in money that is used as “returns” for the older investors the guy running the scheme skims of the top. Ponzi’s Idea of traffiking in international mail vouchers would have worked but been prohibitivily expensive to administer.

My favorite example of a Ponzi scheme is Social Security, It bears all the earmarks of a good scam. It was sold as foolproof to the initial investors. the money is spent almost as soon as it comes in. and most importantly the “Plan” only works as long as the population of people paying in is increasing.

<insert witty sig here>

Here are a few sites related to multi-level marketing (MLM) from Quackwatch. The first is under construction, called MLM Watch: . The second & third focus on health-related MLMs, but may still be of interest: and .

“A woman came up to me and said ‘I’d like to poison your mind with wrong ideas that appeal to you though I am not unkind’” – They Might Be Giants, “Whistling in the Dark”

Sorry, Smeg, but it’s thinking like this that allows the pyramid scam artists to continue operating. What you really mean to say is “*I WISH it would have worked and I had been among the guys supporting the capstone.”

P.T. Barnum’s old saw “There’s a sucker born every minute.” was never more apropos.

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Hmm. So I take it everyone who posted before the board changeover is referred to as a “guest”? Why does this happen in some threads but not others?