Did you ever see that episode of NBC’s The Office, where we learn that Steve Carrell’s character didn’t go to college because he lost all his tuition money in a pyramid scheme? And later, “Michael” tries to get his staff to sell calling cards, not realizing that he’s been conned into another pyramid scheme?
Unfortunately, if it sounds too good to be true, it is. And no matter what promoters say, pyramid schemes / chain letters are illegal. It is your responsibility to keep yourself and your family safe. Recently your BBB serving Eastern Washington, North Idaho and Spokane received calls from people investigating money-making opportunities.
One caller asked if there is anything “controversial” about cash gifting. He wanted to know if this business model were legitimate. Another caller received a letter asking her to send one dollar to five people for a “mailing list.” She was confused because the letter claimed it was “perfectly legal” and that the offer had been vetted by “a senior lawyer.”
The first offer involved joining a club and gaining easy wealth by donating money. The second offer was a chain letter, no product involved. Both raised red flags with the BBB.
• They promised big money with no skills or training in a short amount of time
• Despite the supposed “mailing lists” with the second offer, there was no real product involved and no purpose for the mailing lists except to mail around to each other.
• True giving has no expectation of getting anything in return. The
The Washington State General’s office has an excellent graphic—link below—that demonstrates one of the problems with pyramid schemes (besides being against the law!):
In order for the “Pharoah” at the top of the pyramid to get paid, 14 people have to participate. If eight people belong to the pyramid, in order for them all to get paid, 112 people have to join. By the time you reach the bottom of the graphic, you learn that if 1,024 people join the pyramid, it would take 14,336 people participating for all the people above them to get paid
• Do I have to make an “investment” or give money to obtain the right to recruit others into the program?
• When I recruit another person into the program, will I receive what the law calls “consideration” (that usually means money) as a result?
• Will the person I recruit have to make an “investment” or give money to obtain the right to recruit and receive “consideration” for getting other people to join?
If the answers are “yes,” BBB warns people to steer clear of the scheme. Don’t give in to tempting claims online and never buckle under to high-pressure sales pitches, even when they come from the mouth of a trusted friend, co-worker, neighbor or church member.
For more information, please visit the Washington State Attorney General’s page or the home of the Federal Trade Commission.