3. Multi-Level Marketing (MLM)
Okay Now Watch This Here is an example of how this type of scam is promoted in a video…
Incredible claims of income are a sure sign of a work at home business opportunity scam!
If the ad you’re looking at features palm trees, a mansion, and a Ferrari, it’s probably a scam.
Okay Now Here is what the FTC has to say about how the scam works. . .
Modem pyramid schemes generally do not blatantly base commissions on the outright payment of fees, but instead, try to disguise these payments to appear as if they are based on the sale of goods or services.
The most common means employed to achieve this goal is to require a certain level of monthly purchases to qualify for commissions.
While the sale of goods and services nominally generates all commissions in a system primarily funded by such purchases, in fact, those commissions are funded by purchases made to obtain the right to participate in the scheme.
Each individual who profits, therefore, does so primarily from the payments of others who are themselves making payments in order to obtain their own profit. – Source FTC Division of Marketing Practices James Kohm