Pyramid schemes (scams)
Most people will have encountered a pyramid scheme in the real world and the internet is full of them. Pyramid schemes offer high returns for little effort. Pyramid shemes get their name from the fact that only the people at the top are likely to make any money. They offer exponential profit in exchange for a one off payment to become involved in the venture. In order to profit you must convince other people to enrol, and they must do the same, and so on. Almost all of the money trickles to the people at the top and those in the middle and the bottom of the pyramid lose out. Because they are illegal in many countries, pyramid schemes generally offer members the opportunity to be involved in selling an "exciting new product". One common product is health pills, and scams often claim that signing up new members is the secondary form of income but this is not the case . Pyramid schemes are illegal in New Zealand, but many of these scams try to look like multi level marketing which is not illegal. Click here to find out about the difference between pyramid schemes and multi level marketing.
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