Avoid any plan that pays commissions simply for recruiting additional distributors. Your primary source of income should be your own product sales. If the earnings are not made primarily by sales of goods or services to consumers or sales by distributors under you, you may be dealing with an illegal pyramid. There must be a way to purchase the goods or services without becoming a distributor.
	Beware of plans that require you to purchase too much inventory upfront. These plans can collapse quickly -- and also may be thinly-disguised pyramids.
	Be cautious of schemes that claim you do little or no work, your downline (those people you've recruited into the plan) will do it for you. It takes a lot of work to make sales and supervise others.
	Don't take claims of miracle products at face value. Just because your sponsor says it's true, doesn't mean that it is. Insist on proof that the product works. Check with an independent source to make sure that you aren't having the wool pulled over your eyes.
	Do your homework! Check with your state attorney general and the National Fraud Information Center before getting involved -- especially when the claims about the product or potential earnings are extravagant.
	Beware of shills -- people paid by the company to lie about how much they've earned and how easy the plan was to operate.
	Don't agree to anything in a high pressure meeting or seminar. Insist on having time to think it over and to discuss things with a spouse, partner or even your lawyer. If a company won't give you the time you need to check it out and think things over, you don't want to do business with it. A good deal now will be a good deal tomorrow; the only reason for rushing you is if the company has something to hide.

If you need advice about a telephone solicitation or you want to report a possible scam, call the NFIC hotline at 1-800-876-7060. You can also ask questions or report fraud using our online forms.

Links for Non-Frames Version
| What is Telemarketing Fraud? | Telemarketing Tips | 
| Telemarketing Statistics | Telemarketing News Index |
| Telemarketing Special Alert | Archived Special Alerts | 

| About NFIC | About the National Consumers League |
| About the Alliance Against Fraud in Telemarketing & Electronic Commerce | 
| Telemarketing Fraud | Internet Fraud Watch |
| Fraud Against the Elderly | Scams Against Businesses |
| News & Views | Links | For the Media |
| How to Report Fraud & Ask Questions | 
| How to Help | Thanks... |
| Back to Welcome Page (Frames Version) |

NFIC is a project of the National Consumers League. 
All rights reserved. © 1999.