What’s the difference between a multilevel marketing program and a pyramid scheme? Pyramid schemes are illegal.
If the money you earn is based on your sales to the public, the company may be a legitimate multilevel marketing plan. Here are some signs that the company is operating a pyramid scheme:
One other key difference: You’re likely to lose money if you sign up for a pyramid scheme.
Today, the FTC announced a settlement with Fortune Hi-Tech Marketing (FHTM), a company that operated an illegal pyramid scheme disguised as a multilevel marketing program. Over 350,000 people were scammed out of a total of at least $169 million. The settlement bans FHTM from the multilevel marketing business and from deceiving consumers. FHTM will fork over at least $7.7 million, which will be returned to consumers.
If you’re planning to buy into a multilevel marketing plan, get the details.
If you’re in the market for a job, investment, or work-at-home business, check out our tips to avoid other business opportunities scams.