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How Can You Tell If You Are Being Ripped Off?
 

Many consumers are duped into joining a pyramid scheme through the use of high-pressure sales tactics, such as seminars or other group meeting environments.

If you are considering going to a meeting to learn about a new business opportunity, and you think it could be a scam, print out the following checklist and take it with you to the plan meetings.

  

Remember: If you think something's wrong, or you can't afford to lose your entire "investment," get out!

Get a printer-friendly PDF checklist here.

CHECKLIST
The National Consumers League's Pyramid Schemes Checklist

If you find yourself considering a business opportunity, and something feels a little fishy, use this checklist to figure out whether you're looking at a scam. If you check any of the following boxes, consider it a red flag. It may be a scam!

You are being told that you can make easy money, surprisingly high profits or returns.
You have to pay a lot of money up-front to participate.
You will not have the opportunity to get out in a reasonable amount of time and get your money back.
You have to buy a lot of stuff (for “training,” or “inventory,” etc.) that you will not be able to return.
You do not recognize the company. You have never heard of the promoter before and have a hard time finding any legitimate information on the promoter.
The promoter is not a member of the Better Business Bureau, local Chamber of Commerce, or other recognized industry trade association (like the Direct Selling Association or the Direct Marketing Association). Note: Even if they are not a member of any of these, you may still be able to find more information about them through these organizations.
Everyone at the meeting seems to be a member of a particular group – neighborhood, church, club, school, or business. Note: Pyramid scheme operators often target “affinity groups,” or people who share similar interests, to take advantage of social pressures.
You are being told that you will make money primarily for bringing in other recruits – and you may even get a share of their initial investment.
You are being offered the opportunity to invest in a company or a franchise, but there is no prospectus or detailed information provided. A prospectus is a detailed document that provides information about the nature of the investment, historic returns, etc. These are often required for franchise opportunities and investments in company stock, for example.
You do not understand what is being offered to you. You are told to trust them, or given examples of others who have been successful.
Something just doesn't feel right. Trust your instincts!

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