Pyramid and MLM Online Business Scams
Any search for making money online is sure to bring you to a slew of scams in business. People tend to trust that if it’s on the Internet and has a nice site, it must be a legitimate business and a real company. That trust mixed with the optimism of someone looking to earn some income online can lead to big mistakes and possible fraud.
Not all businesses online are legitimate ways to make money. Some of these are in fact illegal. They may not have been shut down yet, but authorities are starting to clean up fraud on the Internet and then these businesses will be in trouble. The problem is that the people involved may also be in trouble.
Besides the legal issues, people involved in pyramid or illegal MLM businesses may lose a lot of money. According to Internet National Fraud Watch Information Center, in 2005 Work At Home Plans presented an average loss of $1785.00. People under the age of 30 (44%) were victims of loss from Work At Home Plans.
How to tell if the business is a scam:
Pyramid Schemes
There is a promise of extremely high income in a short period of time.
A pyramid scheme depends on making money from new members.
You make money when you recruit another person or a specific number of people and they pay into the pyramid.
The majority of income made is from the investment of membership and new recruits
There is no product or service being sold.
The money you invest may be called a “gift” or “loan” (a loop-hole they think will protect them from legal issues).
MLM Schemes
There is a promise of extremely high income in short period of time.
Typical or average member’s incomes are not disclosed.
Members invest money and make money mainly or solely from recruiting new members.
If you have not recruited anyone you don’t make money.
There may be a product or service being sold but it is only or mainly sold to members.
The product or service has an inflated price.
Members are required to buy overpriced or a large quantity of inventory.
Legitmate MLM (note some Countries have different definitions of what is illegal)
There is a definite value in the product being sold.
You can make money by just selling the product.
The majority of money comes from sale of the product.
The product is sold to people outside of the membership.
Even though you can make money from a down-line (or recruiting members) it is not essential to making money.
Enticements that may be used by some or all schemes Pyramid and MLM:
Many people involved with the business trying to recruit by posting comments on forums, blogs. They also recruit by pretending to be a scam watch site, when in fact they are merely trying to get people into the business. They may advertise to appeal to people trying to avoid scams.
Resources for fraud information:
http://www.fraudbureau.com/
www.sec.gov/investor/pubs/cyberfraud/signs.htm
http://www.betterbusinessbureau.com/
For some tried and true ways to make money honestly and that do require work but are scam free try the following :
The Review Stream. Here you can write reviews on almost anything you can think of and it pays $2.00 per review posted. I signed up wrote two quick reviews and both were sold for a total of $4.00. Not bad for ten minutes of work! This isn’t going to make you rich but it will give you some pocket money.
Check it out and make some extra cash right now!
http://www.reviewstream.com/?inv=WpDAh7t8dGPT
Profit Article, a step by step guide with links to step up a paying blog and all you have to do is follow the steps to get started. This is for people who intend to put time and effort into creating an income that can grow for a long term future. Profit Article charges a one time fee that’s worth every penny to get you on a new income path. The information is vital and it includes links to what you need and extras.
www.paydotcom.com/r/40669/greatb/2997784/
Paid Article Writing: If you can write, can put some time into regular writing and make some money too!
http://www.helium.com/
www.writerlance.com/cgi-bin/lance/r.cgi?greatb
Clear Surveys, this is to buy a list of paying survey sites. I used it (although I didn’t sign up with every business listed) and regularly get about five survey invites a day. I found it less time consuming to get the list rather than do searches myself. If you would rather, you can also find paying survey sites on the Internet without paying anything, but you may miss some of the higher paying sites.
www.paydotcom.com/r/15632/greatb/2997764/
Mystery Shopping, I personally signed up with Shadow Shopper and tested it out. I had more than ten opportunities a day to pick from and made money within my first few weeks. Most of the communication is done online, the actual shops are located in an area nearby that you can choose. I also got invitations for part-time and full-time merchandising work that was for regular pay.
Shadowshopper:
Click here to visit ShadowShopper.com
Pay For Post
Pay for blog posting, great for bloggers who want to make great money:
Not all businesses online are legitimate ways to make money. Some of these are in fact illegal. They may not have been shut down yet, but authorities are starting to clean up fraud on the Internet and then these businesses will be in trouble. The problem is that the people involved may also be in trouble.
Besides the legal issues, people involved in pyramid or illegal MLM businesses may lose a lot of money. According to Internet National Fraud Watch Information Center, in 2005 Work At Home Plans presented an average loss of $1785.00. People under the age of 30 (44%) were victims of loss from Work At Home Plans.
How to tell if the business is a scam:
Pyramid Schemes
There is a promise of extremely high income in a short period of time.
A pyramid scheme depends on making money from new members.
You make money when you recruit another person or a specific number of people and they pay into the pyramid.
The majority of income made is from the investment of membership and new recruits
There is no product or service being sold.
The money you invest may be called a “gift” or “loan” (a loop-hole they think will protect them from legal issues).
MLM Schemes
There is a promise of extremely high income in short period of time.
Typical or average member’s incomes are not disclosed.
Members invest money and make money mainly or solely from recruiting new members.
If you have not recruited anyone you don’t make money.
There may be a product or service being sold but it is only or mainly sold to members.
The product or service has an inflated price.
Members are required to buy overpriced or a large quantity of inventory.
Legitmate MLM (note some Countries have different definitions of what is illegal)
There is a definite value in the product being sold.
You can make money by just selling the product.
The majority of money comes from sale of the product.
The product is sold to people outside of the membership.
Even though you can make money from a down-line (or recruiting members) it is not essential to making money.
Enticements that may be used by some or all schemes Pyramid and MLM:
Many people involved with the business trying to recruit by posting comments on forums, blogs. They also recruit by pretending to be a scam watch site, when in fact they are merely trying to get people into the business. They may advertise to appeal to people trying to avoid scams.
Resources for fraud information:
http://www.fraudbureau.com/
www.sec.gov/investor/pubs/cyberfraud/signs.htm
http://www.betterbusinessbureau.com/
For some tried and true ways to make money honestly and that do require work but are scam free try the following :
The Review Stream. Here you can write reviews on almost anything you can think of and it pays $2.00 per review posted. I signed up wrote two quick reviews and both were sold for a total of $4.00. Not bad for ten minutes of work! This isn’t going to make you rich but it will give you some pocket money.
Check it out and make some extra cash right now!
http://www.reviewstream.com/?inv=WpDAh7t8dGPT
Profit Article, a step by step guide with links to step up a paying blog and all you have to do is follow the steps to get started. This is for people who intend to put time and effort into creating an income that can grow for a long term future. Profit Article charges a one time fee that’s worth every penny to get you on a new income path. The information is vital and it includes links to what you need and extras.
www.paydotcom.com/r/40669/greatb/2997784/
Paid Article Writing: If you can write, can put some time into regular writing and make some money too!
http://www.helium.com/
www.writerlance.com/cgi-bin/lance/r.cgi?greatb
Clear Surveys, this is to buy a list of paying survey sites. I used it (although I didn’t sign up with every business listed) and regularly get about five survey invites a day. I found it less time consuming to get the list rather than do searches myself. If you would rather, you can also find paying survey sites on the Internet without paying anything, but you may miss some of the higher paying sites.
www.paydotcom.com/r/15632/greatb/2997764/
Mystery Shopping, I personally signed up with Shadow Shopper and tested it out. I had more than ten opportunities a day to pick from and made money within my first few weeks. Most of the communication is done online, the actual shops are located in an area nearby that you can choose. I also got invitations for part-time and full-time merchandising work that was for regular pay.
Shadowshopper:
Click here to visit ShadowShopper.com
Pay For Post
Pay for blog posting, great for bloggers who want to make great money:
posted by Brenda M | 6:43 PM
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