Talk:Pyramid scheme

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[edit] Pyramid Scheme Illegality

"Although pyramid schemes have been declared illegal..." Where? USA Jurisprudence?

illegal in Austria (clem 17:42, 23 Apr 2005 (UTC))

I believe pyramid schemes are illegal under mail fraud statutes, and perhaps false advertising, but I don't think there is a specific law against them. Superm401 02:21, 8 Jan 2005 (UTC)

They are illegal in the UK now. Davidbod 00:05, 30 July 2006 (UTC)

[edit] Gratis

Should Gratis be used as one of very few concrete examples of pyramid schemes in the article? It seems like the fact that even if you participate in it, but don't succeed in getting the free item you haven't lost anything, or sent anyone money differentiates it from a straightforward pyramid scheme. --AliasXIII 17:49, 14 Mar 2005 (UTC)

I don't think it's a very good example of a pyramid scheme. From my understanding, the idea of a pyramid scheme is that the base of the pyramid pays the return on the top's investment, requiring (as the article states) exponential growth, and crashing once new users run out. Like you stated, with Gratis there isn't (necessairly) any investment to lose, and the fact that users can sign up for multiple offers means that the growth required is drastically reduced. It might well be some kind of scheme, but by definition it's not a pyramid scheme. I've edited the Gratis page to say as much, (link: Gratis Internet), and will change this one as well in a few days, but if someone has a better example I'd rather the section be replaced rather than removed. Thanks, --Dashpercent 09:19, 1 Jun 2005 (UTC)

Gratis Internet is not a pyramid scheme. They do not recieve money from their members or their member's referals. Gratis Internet is an affiliate marketing company and earns it revenue from the fees advertisers (such as eBay and Netflix) pay to aquire new customers. On the surface the distinction is subtle, but look at the trends in affiliate marketing/ incentivized marketing and one will see that one business model (pyramid) is illegitimate and the other is not.

^Correct. The fact that signing up for Gratis does not cost anything, and also that after you sign up, you're not required or even pressured to complete an offer. It's all about effort, and the likelyness of completion does not matter when, or how you sign up.

[edit] Pyramid schemes without money

I have seen pyramid schemes where no money gain is advertised; as a kid, I participated in one, sending chocolate to others on the list; I think my father (he has a clothes shop) mentioned a pyramid letter thing where business friends would send underwear (unused, I hope). Variants might also include postcards or smthn like that. (clem 17:41, 23 Apr 2005 (UTC))

[edit] Beware Pixstar and Worldwide Dreambuilders

These people act like they are interested in you, talking about financial independence, being your own boss, serving more people is the way to make more money, etc. Pixstar and Worldwide Dearmbuilders are pushing a pyramid scheme on you. They try to get you to sign up for online access to products and then motivate you to excite others to do the same through your reference. The more people sign up through YOU, the more you "upline" (i.e. guy who conned YOU into doing it) makes in terms of a bonus.

Come on. I dare you to meet the people that I work with. You don't have a big enough desire to make a difference in this world to make a statment like that. It is obvious that you know nothing about the details of what WWDB does and stands for. Just build the buisness and help someone change there life for the better and then come talk.

I vote for removal of this entire section since it's so obviously POV on both parts. Orthografer 06:54, 24 November 2005 (UTC)

[edit] Minor Change

I changed the term "IBO" to "participant" as the former acronym was not defined earlier in the article.--Chuckhoffmann 06:59, 13 January 2006 (UTC)

Fixed the (broken) link to "Cutco Knife Company" to correctly point to Vector Marketing.--Britannicus 16:05, 15 February 2006 (UTC)

[edit] "What to do" section

Should Wikipedia be giving advice? While I generally agree with the advice given, I don't know that it's the role of an encyclopedia to provide that sort of advice. Though a link to a gvt. web page where that sort of advice is given would be apropriate. Generic69 02:12, 5 February 2006 (UTC)

I agree, on all points. 68.14.76.141 09:41, 10 April 2006 (UTC)

[edit] Market Saturation

Is the math in this section correct? I think if each member must recruit 2 more beneath them the percentage of losers is 87.5%. See http://www.pyramidschemealert.org/PSAMain/pyramids/progression.html.

You are probably correct. I wrote the section to emphasise that the bottom layer always loses money but in truth, the people in the layer above, and maybe the layer above that do too because of the way the money is divided. I suggest it would be worth changing the section to make it clearer if your link is a more accurate representation of how these schemes work. --MagicMoose 21:40, 13 March 2006 (UTC)

I totally rewrote the section after a lot of thought and hopefully it makes a lot more sense. I initially misunderstood how the recruit 2 / 8-ball models worked and have adjusted the description and stats now that I do know how they work. --MagicMoose 23:52, 21 March 2006 (UTC)

[edit] Paypal Pyramid Schemes

Recently a lot of paypal pyramid schemes are appearing on the Internet. It would be great if someone would discuss on that subject in this article, or maybe in a new article. Dooga 00:20, 14 April 2006 (UTC)

[edit] Question

I've always been wondering one thing when I read mails advertising pyramid schemes. They tell me to mail a few dollars to some guy and put my name at the bottom of a list. What's stopping me from putting my name at the bottom of a list without mailing any money to anyone? In fact, what's stopping me from putting my name right at the top of a list? Who's going to know whom I have sent money to, or where I have posted the mail? All this makes pyramid schemes even more dangerous and false, because there is no guarantee a new recruit will ever be paid any money, no matter how many levels of recruits come after him. JIP | Talk 13:35, 23 April 2006 (UTC)

I was thinking the same thing...except, of course, that you wouldn't want to put your name at the top of the list, since then you'd be knocked off the pyramid after one iteration.

But this page was still pretty helpful in explaining the problems. I just got a form letter that said I should purchase names and addresses from some random company. I have a feeling the creators of the letter don't care about the $1 at all, but rather the $150 for names and addresses...pretty slick.

[edit] Civic Duty and Due Dilligence

I have removed this section entirely, as it violates Wp:not#Wikipedia_is_not_an_indiscriminate_collection_of_information point 8. Instruction and advice is not appropriate for a wikipedia article. In addition, the entire section pertained only to the United States. --Xyzzyplugh 03:11, 24 July 2006 (UTC)

[edit] Matrix Scheme Link

I have noticed that someone added that Matrix schemes are mostly viewed to be legal, yet there is no evidence to this. I agree with the comparison, but do not agree with that statement. The OFT has identified them as being scams and at this point there are no statemtns which would lead someone to believe they are legal. Arzel 17:04, 24 July 2006 (UTC)

The article is clearly no longer true in this regard. I have re-written the intro to make this clearer.Davidbod 00:29, 30 July 2006 (UTC)

[edit] Names of famous schemes

Bit disappointed some schemes were not mentioned by name here - in particular Women Empowering Women which is so notorious it probably deserves its own article. Any others we should name? Davidbod 00:29, 30 July 2006 (UTC)

I just made a mention of it in the 8-ball section and of "gifting". It could probably be described in more detail in its own section. I think it would also be worth going through some of the psychological techniques that these scams use to push people's buttons. For example, someone in a scheme near me started putting it about that a local celebrity was involved, thereby conveying some kind of legitimacy on it - "well if he's doing it, it must be legal etc.". The WEW scam no doubt went to great lengths to make women think their hubbies were yahoos who wouldn't understand the scheme and therefore best not mention it at all etc. Unfortunately there are so many links to WEW that I've yet to describe one with a first hand description of how it works but it's clear it's just an 8-ball --MagicMoose 11:55, 24 August 2006 (UTC)

[edit] Is this a contradiction?

From the last part of the article:

These businesses thrive on selling sample cases of their products to newly recruited salespersons, and will offer bonuses to members which recruit new salespersons....In addition, these legitimate businesses do not pay bonuses for the recruitment of salespeople.' Thanos6 06:01, 4 August 2006 (UTC)

[edit] Comparison to MLM's

I don't see the purpose of this section. For one it does NOT offer a comparison to MLM's. It seems to be nothing more than a shill for a few MLM's. Since this article is not about MLM's I think this section should be removed, or if a comparison section left in, it should deal specifically with the differences between MLM's and Pyramid schemes. Arzel 15:17, 17 August 2006 (UTC)

I agree. There might be reputable MLMs, but there are plenty of disreputable ones with a failure rate mathematically built-in. --MagicMoose 12:14, 24 August 2006 (UTC)

I agree as well, the section comparing popular MLMs to pyramid schemes is totally unsourced for something raising such a controversial claim, weasel words also abound ("may lead to" "Simular") and without sources for the assertions that they strongly urge referals over product sales must be sourced because they are boarderline attacks on the companies in question. In addition phrases like "they consider themselves..." speak to a strong POV issue. Would it be alright if I attempt a cleanup of the section? Wintermut3 07:52, 20 January 2007 (UTC)

[edit] Intro mention of MLM

There's a sentence in the intro that seems too strong to me. It's

There are other commercial models using cross-selling such as multi-level marketing (MLM) or party planning which are perfectly legal and sustainable.

I think that's a little strong, and the sentence seems a little weird in its context. I'd be inclined to change it to

There are other commercial models using cross-selling such as multi-level marketing or party planning which can be perfectly legal and are claimed to be sustainable.

and also to move it a little lower. I also might remove the mention of cross-selling and go with a different intro that better matches the related paragraph in the text. Would people mind? William Pietri 15:30, 11 October 2006 (UTC)

I agree. MLM should be mentioned as a means of business whose model of income relies in part on recruiting new members (i.e. creating a downline), but claiming it is sustainable or legal depends on the MLM. Lots of pyramid / matrix schemes attempt to look like MLMs by selling some product, but they are still pyramid schemes. The legality would MLM would be defined by the income derived from the product and who its sold to outside members of the MLM. There should be a brief description of an MLM with comparison to pyramid schemes including wording to the effect described above, but actual instances of MLMs can be described in their own article. --MagicMoose 12:14, 1 December 2006 (UTC)

[edit] Extra links

I am removing an external link at the bottom of the page that is labeled "Pyramid scheme - Monavie" and links to a company called Monavie. There is nothing in the text of this article to warrant this random link. If the article wants to discuss Monavie and how it relates to pyramid scheme, then go ahead. But for now, I'm going to remove it.

Thanks! Bsheppard 06:16, 4 December 2006 (UTC)

From googling around Monavie appears to be some dubious health drink with claimed medicinal properties being promoted via MLM style tactics. So not a pyramid scheme but definitely a MLM and possibly a dubious one. The fact that it makes medical claims complete with nonsense about extracts of plants from the Amazon should set alarm bells off. If it did what it claimed it would be a drug and require FDA approval, if it doesn't then the person selling it is peddling snake oil and on very thin ice indeed. --MagicMoose 12:38, 4 December 2006 (UTC)

[edit] Removed bad link to FTC

I removed the link to the FTC's section on Pyramid Schemes because it no longer worked. When I have a few minutes, I'll try and find the correct link, unless someone else finds it first.

Bsheppard 06:19, 4 December 2006 (UTC)

[edit] Randomizers

I used to be involved in the GPT (Get Paid To) arena and I used to see randomizers advertised all the time. They are a pyramid scheme slightly upgraded to include indirect referrals. Here's how they work:

Alice signs up for "Dollar Randomizer" by creating an account and paying x amount to a member along with an administrative fee. She is given a referral page that she then promotes to bring in new members who will pay her x amount when they join. On top of this, any random or anonymous visitors to the page are presented with a random referral page, which could be Alice's or someone else's. Alice can increase her chances of it being her page being shown to random people by 1. upgrading her account or 2. bringing in a lot of new members.

Sometimes these programs offer other perks of being a member, such as advertising or stuff for download and/or resale. I actually joined one because they had a lot of e-books and software packages available for free with resale rights (thought there might be something there I could sell and make money from). My guess is the resale stuff is a flawed attempt to make it look like an MLM.

-- Arcturis 18:46, 22 December 2006 (UTC)

[edit] People removing links to MLMs or pyramid schemes

I noticed that somebody removed a link to - Alston Price. Upon review of this site it is obviously a pyramid scheme. I would ask people to vigilant to people removing links without good reason. If there is debate about site then take it up in discussion. On a side note I found a site which is a veritable rat's nest of Pyramids, Ponzis and other dubious get rich quick schemes, might be worth a look for other examples - [1]. There is some breathtaking gullibility in that forum. --MagicMoose 15:42, 30 January 2007 (UTC)

[edit] Reduce overlinking

I'll happily admit to being a newbie, but I think some sections of this article exhibit link clutter and could stand being removed - notably the links to Dinner, Captain and others in the "8-ball" model section. Admittedly a minor nit, so I'm asking for clarification here. 213.162.65.17 15:15, 31 January 2007 (UTC)

I'd agree. Be bold and fix it. William Pietri 07:38, 1 February 2007 (UTC)

I just fixed it. I left in gemology but the rest are history. --MagicMoose 16:34, 2 February 2007 (UTC)

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