Nowadays money making scams are well disguised and well blended and are more sophisticated. Unless you know the differences and being able to recognize the tactics a pyramid scam uses, you may find yourself tempted to join and become involved. It is all based on human greed.

Here are some excellent guide lines to consider before joining a network marketing opportunity.

1. Avoid plans that pay commissions for recruiting additional distributors. It may be an illegal pyramid.

2. Avoid plans that require new distributors to purchase expensive inventory. These plans can collapse quickly and also may be disguised pyramids.

3. Avoid plans that you will only make money through continued growth of new “downlines” - the commissions on sales made by new distributors you recruit instead through the repetition of sales of products you and your network make.

4. Avoid plans that claim to sell miracle products or promise enormous earnings. Always ask to substantiate claims with hard evidence.

5. Beware of “Commission References” paid by a network marketing company to describe their financial success in earning money through the plan.

6. Do not make any payments or sign any contracts in an “opportunity meeting” or any other high-pressure situation. Insist on taking your time to think over a decision to join. Check the products cooling off period.

7. Do your homework. Check with the Direct Selling Association and Ministry of Domestic Trade and Consumer Affairs about any plan you’re considering especially when the claims about the product or your potential earnings seem too good to be true.

The tragic aspect of “Pyramid Schemes” or “Get Rich Quick” scams is that they concentrate on exploiting people with limited means and limited business knowledge of people who are willing to invest into the program hoping to make a fast buck out of it.

Thousands of unsuspecting and trusting people have lost millions of dollars by investing into these schemes. Even worse, these schemes may have robbed some people’s life savings, some are asked to pay by credit card first in order not to lose out of the opportunity of early placement in the pyramid. There are those who borrowed the money, notice it is so easy to get a personal loan and eventually have to service the debt for the next few years.

Pyramid schemes are illegal in many parts of the world. Keep in mind that it is difficult to prosecute these schemes and even if there are prosecuted most often the money invested is lost and can not be recovered. Be wise when you are offer an opportunity that is too good to be true. Always think twice.

“One’s first step in wisdom is to question everything - and one’s last is to come to terms with everything” - Georg Christoph Lichtenberg

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