The reappearance of pyramid scam schemes is impressive due to the number of people in the world who have become unemployed as a result of the crisis caused by Covid-19. Lately I have known people who have ‘fallen’ into this scheme, who say they will make money with their ‘shares’ there, and worse still, who drag other people who out of despair and ignorance believe in this issue and ‘invest’ their savings.
But what is a pyramid scam scheme? how does it work? How to identify them in order to avoid them?
The pyramid scam scheme is one where associates, participants, investors or subscribers must make a input contribution and also pay a monthly fee, having to attract new participants that will produce benefits for the original investors and the more new participants you attract, the more the monthly fee will decrease and you are guaranteed a greater profit in the business.
These schemes are known as Pyramid Scheme, Business Pyramid Fraud or Pyramid Scam, Pyramid Scams, Multilevel Scheme, Clouds, Fractals, Flowers or Silver Circles, among others.
The life of this type of pyramid scam is relatively short or medium-term, since it is sustainable as long as new participants are recruited in an amount that allows the original participants to generate benefits and when this decreases the investor population is saturated and reduced member benefits. Most of the remaining subscribers are left without any profit after having financed the profits of the primary associates all the time.
Pyramid schemes are prohibited in countries such as the United States, United Kingdom, Germany, Canada, Romania, Colombia, Malaysia, Norway, Bulgaria, Australia, New Zealand, Japan, South Africa, Thailand, Venezuela, El Salvador, Iran, Dominican Republic, China , Mexico, Peru, Chile, Ecuador, among others.
How do they work?
People who sell themselves like millionaires appear, with very luxurious cars and houses that are not even theirs, they talk about how successful they are without working, without studying, they even demerit the value of education, and offer to make you part of their team and give you the secrets of their success because they are so grateful to life that they feel compelled to share them.
They sell you the scheme as something easy to do, where you contribute very little and without effort, they work on self-esteem by telling you that you only have to involve more people in this project so that like you, they are part of the success, and they drive you by stating that “ Don’t you have friends, family, acquaintances with whom you can share this secret? In return they offer to pay a very low entry fee and a monthly fee that will decrease depending on the number of people you recruit, receiving in return a profit that they guarantee you and that sounds very interesting in the first place.
In recent years, this type of scheme is found in areas such as stock trading, money market, tourism sector, among others.
In Spain there was one of these cases where only in that country there were 50,000 investors and that reached Brazil with 240,000, the Dominican Republic with 150,000 and other countries such as Colombia and Peru where there are no exact figures on the number of involved, but in total involved more than 750 million euros and where all investors lost their savings.
These ‘investors’ were told that they only had to spend 10 minutes a day and the guaranteed return or profit was 265%. In the United States, the best known case is that of Bernard Madoff, who with pyramid schemes in the world of finance managed to swindle more than 65,000 million dollars and at the age of 75 he was sentenced to 150 years in prison.
How do we identify a Pyramid Scam scheme? 1. They offer entry fees and low monthly fees that will decrease depending on the number of people you recruit. 2.- High profitability that in full light looks very attractive. 3.- You don’t have to spend a lot of time or effort on this project. 4.- Recruit or recruit new people to join and you will earn more and pay less. 5.- They give talks by negative leaders who sell themselves as millionaires who have made a lot of money and have a very good life without working hard and without the need to study.
Pyramid schemes are a deception, whatever their form, so we must be alert and not fall into the networks of those people who take advantage of the need of others and more in the current times where unfortunately many people have lost their jobs and they see how month after month their savings are diminishing and they see in these promises to earn a lot by doing little as an alternative to generate income.
Don’t believe these people who tell you “do you want to earn extra money? Ask me how ”,“ Invest with me and I guarantee that you will generate income easily ”.
It is important to keep in mind that the only way to earn money is by working in a dedicated way and putting passion into everything we do. When in doubt if you are facing a pyramid scam, review this list that I have left you before, or write me to my networks with complete confidence, let’s not let unscrupulous people continue to harm innocent people.