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Pyramid SchemesGuide to the scams of pyramid schemes, the disadvantages of a money pyramid scheme, matrix schemes and the other names for pyramid schemes: Pyramid schemes were one of the biggest scams from the 1960s to the 1980s and sadly they still exist today. The internet seems to have rejuvenated pyramid schemes. This article will discuss pyramid schemes so that you have a better understanding of how sales people falsely state they work and how they falsely claim that great sums of money can be made. Pyramid SchemeA pyramid scheme is commonly a way that claims to make investors money from depositing a large one off payment of cash. In return for enrolling more investors the original investor will get a vastly inflated return of their money. Though the reality of a pyramid scheme is that few people, if any will see a return on their money and many, if not all, will even loose their original investment. The only person to make money from a pyramid scheme is the con man or woman behind it, ie the person at the peak of the pyramid. He or she will gain the money of the people at each of the tiers of the pyramid and after getting his or her hands on the money or cheques of the lower pyramid tier investors will probably never be traced or found. Money Pyramid SchemeThe money pyramid scheme is the classical pyramid scheme. Investors will typically be asked to invest several thousand pounds and if they can sign up a set amount of people, usually 2 to make it seem achievable, in a set amount of time. he time scale is often as low as one week or a month. If the investor can achieve this they are promised returns such as ten times the amount of their original pyramid scheme investment. Such a high return of money in such a short time scale is the reason why so many people are tempted into pyramid schemes. Other reasons is that friends and family entice them to join up to help them and get an investment back in return. The disadvantages Of Pyramid SchemesThere were and still are many disadvantages of pyramid schemes. People who invested in pyramid schemes had to approach absolutely everyone they met and tell them about this great money making opportunity. They were so desperate to get their sign ups or second tiers that they would harass anyone and badger them into joining. Many investors in a pyramid scheme not only lost their money, but they also lost many friends and relatives. Many made a few enemies from those they signed up to this false investment and subsequently lost their hard earnings and saved money. Many people lost retirement nest eggs and life time savings. Others went into a life time of debt, re-mortgaged their homes or had to sell their houses to pay off debts and many became bankrupt. All because of the greed and harassment of upper level investors. No pyramid can stay upright when the foundations are broken and many investors could not lay their foundations, ie get lower level sign ups . So the pyramid would collapse and this is where the pyramid scheme scam came into place. There would be small print in a contract that if the investor did not achieve a set number of lower level investors by a set time frame then they would forfeit their initial investment with no re-dress. This money went straight into the pocket of the top level investor, ie the person who set up the pyramid scheme, who would laugh all the way to the bank. Are All Pyramid Schemes A ScamSo are all pyramid schemes a scam? In our experience, yes. We would love to learn of a pyramid scheme that is not a scam because the claimed returns are so high we could invest and retire! The reality is that only hard work and safe and shrewd investments will give you a return on your time and money. It would be better to invest your £1000s in a safe investment like Premium Bonds where you can get a return on your investment and your original sum of money that you deposit will be returned to you. The best advice is to stay well clear of pyramid schemes. Other Names For Pyramid SchemesConmen have tried to disguise their scams by using other names for pyramid schemes. These include gifting circles, women empowering women, liberty scheme, people in profit, donation club, calculator scheme, debt reduction schemes, circles of success, etc. Matrix SchemesA variety of pyramid schemes are matrix schemes where people join in the hope of getting a product when they rise to the top of the pyramid by getting a set number of sign ups below them. Typical reward products in a matrix scheme would be new brands of televisions, laptops and other high priced electrical equipment. Is Kleeneze A Pyramid Scam?Many people see the Kleeneze opportunity as a pyramid scam but we have successfully done this and can vouch that it is not. There is a small investment (as little as £75) and this is why some people have claimed Kleeneze to be a pyramid scam. But for the small investment people will get a business pack and the ability to earn money each week - two things that classic pyramid schemes do not offer. Kleeneze is also one of the founding members of the Direct Selling Association and support their distributors in making money. Indeed many work at Kleeneze full time and make thousands each month from selling their products in their local areas. There is the opportunity to build and support a downline with Kleeneze and this is another misconception for people who mistake Kleeneze for a pyramid scam. Kleeneze is a multi level marketing company and people do try and concentrate on their down line rather than focusing on selling the products which can earn just as much money. We have written more about Kleeneze in the Kleeneze Reviews. Do avoid the classic sting of the pyramid schemes scams though: no-one gets rich quick in this life. If you have a large sum of money to invest then look carefully for a safe investment using a well know investor such as National Savings. Help keep pyramid schemes a thing of the past by ignoring any offers of joining a pyramid scheme, especially e-mail offers of pyramid schemes. Other pages of interest in the scams section include: Internet Scams Stuffing Envelopes If this page has not answered your questions or you need some more advice then please feel free to e-mail me. I would also welcome any advice to increase the information on this page to make it more useful to others. So feel free to e-mail me your thoughts. I would also appreciate it if you were to send the url of the www.findextrawork.co.uk to your friends, forums and websites. Automatically Add www.findextrawork.co.uk To Your Favourites Folder - Bookmark Us. The site is updated weekly with new earning opportunities. |
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