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Removed the "citation needed" notice from :
"Though sharing a similar nomenclature the concept of the pyramid scheme does not have any direct association with the Great Pyramids of Egypt, nor did it in fact originate in Egypt."
since the only connection is obviously just the geometric relation between the object and the organization of victims in "pyramid" scams. It hardly needs a citation, particularly since it would be difficult to find a citation for a negative (a lack of connection between the two things).156.34.60.157 11:03, 10 May 2007 (UTC)
"Although pyramid schemes have been declared illegal..." Where? USA Jurisprudence?
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)
This is definitely a topic the article should address. I myself have witnessed friends participating in pyramid schemes (which of course, always offer some reason why they are not technically a pyramid scheme), but have been unsure what to do about it. Are they illegal? I'm guessing that in some form, they are, in other forms, they are not. We really need a legal expert on the matter JohnnyCalifornia (talk) 17:35, 21 June 2008 (UTC)
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.
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))
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.
Its funny, i just ran into some guy who made me watch a dvd on Pixstar and Worldwide Dearmbuilders. its true, they do act like they are interested in you. watch out for this.
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)
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)
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.
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)
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.
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)
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)
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)
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)
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)
There's a sentence in the intro that seems too strong to me. It's
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
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 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)
--MagicMoose 12:38, 4 December 2006 (UTC)
Every thing written in the above quote is pure conjecture gathered from a googling experience. "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" This statement assumes that the proprietors of this "nonsense" submit to the FDA as the final word on what is healthy and worth marketing, and that anything with medicinal properties is a drug and should be regulated as such. I recommend that simply "googling around" should not be the sole determining factor to determine if something is dubious or not. did the author of this post do enough googling to determine factually that what is writen about this product is "nonsense" or does this poster have the opinion about any and all "extracts" from the Amazon to conclude that any medicinal value claimed from this region is "nonsense". I have "googled this product as well and anyone else who does so will see that the proprietors of Monavie do not mention any kind of "extract". which leads me to believe that the above poster did not google enough about the product or company of Monavie to construct an informed enough opinion to suggest to anyone whether or not Monavie is dubious. Anyone who has read enough reports in medical science and on the Amazon knows that the Amazon region is an as yet unlimited source of known and undiscovered plants and "extracts" containing food and chemicals of medicinal value. Acai berry which is the paramount ingredient in Monavie's marketing is well known as such and therefore any reference to the acai berry as medicinal or nutritious cannot justifiably be considered "nonsensical" without further study or reference.24.1.103.99 00:30, 3 October 2007 (UTC)
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)
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)
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)
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)
Are not all corporate companies gloified pyramid schemes? True many MLM companies turn out to be scams or they cave after a short period of time because their products are not in high demand, but the fundmental principles of a pyramid scheme are inherent in any corporate company. There will always be CEOs and stock holders who employ store owners (who have to pay a fee to own a piece of the franchise, I might add), who hire managers, who hire employees. In every store you see managers and they hire department managers and they hire employees. That's the way it is in small businesses as well. I worked for a small bread company a while back and because my boss owned a franchise license part of his earnings went to the Corporate Offices. Now, working at his company, I could never have his position. I could never exceed his level or pay, no matter how hard I worked. I would never own his business. It's the same with all corporate companies. I can never become a manager unless the person above me gives up there position entirely or dies. Even then, my promotion would be politcal, so there is a chance I wouldn't get the position anyway (and most MLM/direct marketing programs promote you by your numbers, not whether they like you or not). So I don't understand all of the negative hype that surrounds the pyramid scheme when the majority of the world's workers belong to one. It's not the concept of a MLM company or the concept of direct marketing that is to blame for bad experiences, because in my opinion, they are both very good ideas. Donald Trump and Robert Kiyosaki agree. They said so.. look it up. It's the money horders who abuse a good idea or those you join with a "get rich" attitude who are to blame. But, even then, you should research the credibility of a company and the people who elong to it before you join on the basis of someone's word. Besides, not all MLM/Direct Marketing Companies are built the same. There are some pyramid schemes that are inverted and if you do more work than the person who got you into it you can overcome their position. Trust me, I belong to one. Easiersaid3
REPLY
No, these Corporations PRODUCE ACTUAL PRODUCTS, such as Hamburgers, Widgets, or Lumber. Pyramid Scams produce nothing only sell 'getting rich'
dude, there are many so called legitimate corporations that sell "nothing" ie information,insurance,cyberspace,radio frequencies other non-material services.24.1.103.99 00:33, 3 October 2007 (UTC)
That may be true, but they are actual products that peopel can use and most of these corporsations are sustainabele unlike pyramid schemes which usually collapse after a few years 89.242.157.60 (talk) 20:52, 9 August 2008 (UTC)
I've removed a few claims of examples: "Another example is a product (such as a dial-up modem purportedly using higher speed and/or using Voice over IP) sold at higher than ordinary retail price for the same or similar products elsewhere." 1) Not a pyramid scheme, just an over-priced product. 2) Original research.
"One example of this type of scheme is XanGo, whose participants purchase bottles of juice at inflated prices on a recurring purchase plan." 1) Not necessarily a pyramid scheme, just a probably over-priced product with dubious health claims. 2) Original research.
Heck, even if you find an actual pyramid scheme (and there are plenty of them out there), you cannot just add them to the article. You need a reliable source that calls it -- specifically -- a pyramid scheme. This article, and its talk page, are not the place for you to warn people about what you believe is a scam or talk about a business that burned you. Mdbrownmsw 16:38, 24 August 2007 (UTC)
This might be a weird point to bring up, but is this article slanted against the subject? I know they're not the most positive business strategies, but more contentious subjects have far more neutral articles. Think of the pyramid scammers. They have feelings too. ALTON .ıl 00:34, 7 September 2007 (UTC)
I concur. The article gets the point across that these "schemes" are frowned upon, but it does so in a way that doesn't feel neutral. Wikipedia is not a soapbox or political platform. We should address the facts only. If, as may be the case, "pyramid scheme" has a special and unique meaning in business academics and is by definition "negative" in some way, then we need to make that clear in the article. For example, the intro could be re-written to say, " 'pyramid scheme' is an academic term used to describe a non-sustainable business model," or something like that. Hope that makes sense. JohnnyCalifornia (talk) 19:03, 21 June 2008 (UTC)
I have issue with the section "identifying features" section This section is extremely POV. for example:
"A highly excited sales pitch (sometimes including props and/or promos)." uhh, this is not a characteristic limited or in any way exclusively indicative of any scheme or scam.
also: "Assurances that it is perfectly legal to participate" again this is not a feature specific to pyramid schemes or scams.
IN fact this article is rife with POV. the entire section "Market saturation
Over 90% of the people who get involved in pyramid schemes never recoup their initial investment.
The people on the bottom level of the pyramid, no matter how shallow or deep it goes, will always lose their money. It is easy to see that the number in the bottom level of the pyramid always exceeds the total of all those in the levels above no matter how many levels there are. If each level must recruit six more below them, the ratio of losers to winners is close to 5 to 1 - ~84% of all investors will lose their money. The pyramid in reality would not be perfectly balanced and some members might be able to partially fill their number of recruits, but the same principles apply."
where are the citations? Is it really so easy to "see" how this illustrates that over %90 of the people involved never profit? The structure of the model does not indicate the potential of anyone within the model failing or succeeding at the pyramid scheme.
What is the cause of the pyramid schemes "collapse", I did not find it this description. Is it government,consumer, or competitor hostility? Do they "run out" of customers, or product materials? (is that possible?) Is there a time constraint?
is it a varied circumstance based upon the particular scheme?
I also have a few suggestions for this article. please define the term pyramid scheme! the description used in this article could he used to define any networked financial enterprise whatsoever. This article could be used to describe an internet access network, such as AOL or Excel(circa 2000) with referral bonuses! I think in this article there should there be a distinction or correlation drawn between pyramid schemes and pyramid scams since it seems to me that scheme describes a business model and scam describes the effect upon those who are conned. Therefore is it true that all pyramid schemes are scams as well? There are just too many generalizations here. The comparison with MLM business models is not thorough and I think it should be supported by defining a contrast with other business models eg corporate,contractor or LLC models this would further develope the distinction and make it clear. Also I think discussion of legality of these business models must be accompanied by definition and reference as to which legal bodies define them as legal or illegal , how and why. for example if the USA is referenced, then the agency that prosecuted or ruled them as such should be referenced as well as what business model is favored and why.
I think this article may be a good start at defining this phenomenon but perhaps it is far from complete. —Preceding unsigned comment added by 24.1.103.99 (talk) 00:22, 3 October 2007 (UTC)
About pyramid crash I have seen it claimed that the reason the pyramid crash is due to the mathematical impossibility of the system sustaining itself. Obviously this is a vague conceptual answer. I have yet to find an "expert" example of how it crashes..the explanation above put in layman terms by the person I inquired about this(I don't believe the person was an expert so I won't reference him.) explained that its because there is not enough global population to sustain the economic model of the pyramid schemes. I find that argument completely unsatisfactory since it could be used to describe ANY economic model particularly the "inflatable paper money system". I don't see this as the reasonable explanation of its legality or a valid explanation of how subscribers to pyramid schemes are somehow doomed to fail. There is no system that is designed in which EVERYONE participates can be guaranteed to be successful. I hypothesize that there is no such system designed in such a way that any and everyone who is willing able to participate(lets say if the entire global population for example will be able to profit. ANY economic system in which the entire global population were participating in an attempt to profit would NATURALLY fail at least in theory because everyone will be "selling" and there would be no one "buying". That would be true of stocks, bonds, franchises ANYTHING. IF everyone owned shares of Wal Mart for example wouldn't the value of its stock be reduced to much LESS than zero!?! I think we need probably a few good neutral minded experts for this highly controversial and theoretical topic. A good start would probably be a study of how it came to be classified as illegal in mast developed countries. Was it recommended by economists to make it illegal? who were they were they neutral in their motives? 71.239.189.97 (talk) 01:56, 6 April 2009 (UTC)
in a recent Skeptics Guide to the Universe podcast, it was mentioned how Amway is a pyramid scheme, yet the FTC has not brought it down due to govt ties. Can someone add this to the article? Not sure how confident I am in doing it myself. 64.6.6.13 (talk) 01:12, 13 March 2008 (UTC)
I did a report on Amway a couple years back for a class, and it is definitely not a pyramid. There's goods and services being sold outside the structure, and nobody (supposedly) makes money on registering others, just on volume moved. I just about died when I saw the 50 or so volumes on Amway from the FTC's case in the 1970s, thankfully the summary was rather short and sweet, blasting the way grocery stores and manufacturers shut out the new guys and praising Amway as innovative and a model business for others to follow. There WERE concerns with price-fixing and with distributors making unsupportable claims, and from my interview with one successful distributor they show a standard plan that was last approved by the FTC about ten years ago. In addition two generations of owners of the parent company were elected president of the US Chamber of Commerce by their peers, which can be seen on the CoC website. I believe the UN gave them an award for green manufacturing. And the only problem I've heard from my business professors about Amway is that they rely too much on the idea of value rather than price point, which is a built-in limiter on market penetration, since many consumers today won't pay more regardless of how much better one's goods are. However, their compensation blows away what Radio Shack paid me before I went back to school.76.252.44.115 (talk) 07:28, 14 August 2009 (UTC)
I think the new Reverse Funnel System pyramid scheme needs its very own wiki page. The reason being, if you look it up, it's IMPOSSIBLE to find impartial information on it. It has expanded to truly insanely massive levels. Youtube and Google are utterly saturated with information that is in the scheme's favour. It's practically impossible to find anything impartial about it. It deserves its own wiki page simple because of the scale of the phenomenon. —Preceding unsigned comment added by 87.194.245.5 (talk) 22:51, 4 May 2008 (UTC)
I second that, if you are looking for cash gifting and programs, you are redirected to the pyramid scheme, there's no information about 1ups and reversed 1ups and half ups. An encyclopedia should explain those systems, and not just ignore it, there's after all a page on cancer too, even if cancer is bad.
Welcome to Nehtefa's talking page. (talk) 12:08, 26 November 2008 (UTC)
There are several issues addressed in the discussion that could benefit from experts. Some of these issues are:
The overwhelming tone of the article is that pyramid schemes are "non-sustainable" (which is technically true, using business jargon) and "bound to collapse." This may be fact, but the point is not supported or explained at all. For all practical purposes, a "non-sustainable" business may be sustained throughout the founders' entire lifetimes. In other words, the exponential nature of these schemes may not be as "non-sustainable" as the jargon suggests. In order to become a "good" article, it needs to be self-contained enough that readers do not have to research "sustainability" in order to have a neutral POV. We need experts, so I'm tagging the top of the page. Please help if you can. (Also, and completely unrelated, the "8-Ball" section smells strongly of original research). Happy editing. JohnnyCalifornia (talk) 17:50, 21 June 2008 (UTC)
This is a continuation of the "POV" discussion hidden above. The more time I spend with this article, the more it seems to have serious neutrality issues. I don't think this was done on purpose, rather it is the product of certain attitudes and language use. "Scheme" itself can be interpreted as a weasel word. Many of these issues can be addressed by simply operationally defining "pyramid scheme" as an academic term. Thus, this article in a sense has been changed to "pyramid scheme" as an academic term, not a reflection of the reality of these "schemes." If for some reason we find it necessary to cover these "schemes" from an alternative perspective, I think we'll need to have two separate articles. Discussion is encouraged. JohnnyCalifornia (talk) 19:19, 21 June 2008 (UT
Second that. I also feel that the person(s) that wrote the Charles Ponzi article and the Ponzi scheme article wrote this article as well - the POV issues continue in those also. —Preceding unsigned comment added by 67.84.10.3 (talk) 19:40, 14 December 2008 (UTC)
how could anybody be so dumb so as to fall into such a trap?? you're selling and buying not products but recruits! it's obvious that it has no point, and so is not a good idea to invest in it! —Preceding unsigned comment added by 190.31.171.114 (talk) 17:14, 1 August 2008 (UTC)
Think about it rationally. If no one fell for the scam, do you really think people would be wasting their time sending it out? Obviously they're only risking breaking the law because it's profitable. If no one fell for it, I guarantee it would not exist. Period. 128.227.27.130 (talk) 06:56, 27 September 2008 (UTC)
Unfortunately it does seem to attract some people, often the same ones, over and over. My BIL has been sucked into several mlms by his friend who has been sucked into them first. At one point it seemed to be a new one every two or three months. It does seem to target a certain personality. No-one has discussed the similarity to religious fervour per se but that's what it can be akin to.PeterSmithee (talk) 18:11, 1 March 2009 (UTC)
In the See Also section there is a link for LGAT, but in the LGAT article there is nothing mentioned about pyramid schemes. What is the connection between those two articles? Retinoli (talk) 22:17, 23 August 2008 (UTC)retinoli
I would propose that in its structure the Church of Scientology is much akin to a pyramid scheme. It requires its members to pay large sums of money to progress through the ranks, at which point they may theoretically be paid in turn by newcomers to the institution. Accordingly, I propose that the Church of Scientology be added to the "see also" links. 128.227.127.149 (talk) 18:55, 26 September 2008 (UTC)
The controversial case of pyramid case in Colombia should be sourced. Please do not include unverified statements. Please read What Wikipedia is not for guidelines. Camilo Sanchez (talk) 16:54, 14 November 2008 (UTC)
Also, it is difficult to figure out what the author is trying to say here. It would be nice if someone cleaned up the ambiguity. The YouTube source is in Spanish, which I don't speak. Mantipula (talk) 04:25, 17 November 2008 (UTC)
Personal statements should not be included in wikipedia, this affects the neutrality. Andressoler (talk) 09:55, 17 Nivember 2008( GMT-5)
the last paragraph says that "The lack of regulation by the Colombian government has allowed certain unscrupulous individuals to take advantage of naive investors" the article cited in reference number 13 talks about the pyramid schemes in different colombian towns, but does not adress the position of the government in detail. I think it should be removed. Gcancelado (talk) 05:37, 25 November 2008 (UTC)
The internet section seems to be a misfit right at the top. Surely the first section is for readers to understand what the subject is.
Amspock (talk) 15:21, 14 December 2008 (UTC)
In the third image it says that the red section represents 88.1% of the people. This is false, it represents 88.2%, as is plainly obvious since the blue section represents 11.8% and together they make 100%. —Preceding unsigned comment added by 210.9.143.240 (talk) 13:00, 16 January 2009 (UTC)
Questnet does not fall into the definition of a pyramid scheme and should be removed from the article. It is a legitimate multi-level marketing company that sells “real” products, e.g. vacation club memberships, and is licensed by the local governments in the 160 countries which it has presence in. The company has 3 million members worldwide and just recently celebrated it’s 10th anniversary.
Vistaultimate (talk) 13:19, 29 January 2009 (UTC)
Can someone explain why there is a link to Vector Marketing? I would like some feedback before I remove it. Vector Marketing is not a pyramid scheme. They do encourage recruiting and compensation for some is based on numbers recruited but their operating business cash flow does not rely on an increasing number of salespeople, like a pyramid scheme. It relys on profit from selling Cutco, which is then distributed top-down to the salespeople. This is multi-level marketing and there is already a link to multi-level marketing and in multi-level marketing there is a link to Vector Marketing. —Preceding unsigned comment added by 75.42.77.203 (talk) 15:58, 13 March 2009 (UTC)
I agree there MUST be a solid defined distinction drawn between programs legally identified as pyramid schemes,ponzi schemes,etc and legally operating programs that are known as MLMs. If all pyramid schemes are OR are not exercises in multi-level marketing, that should be noted but it is obvious at least in legal terms that not all MLMs can be identified as pyramid schemes. I accept that some MLM programs might desire to be referenced because of the "popular" but apparently POV conception that they are indeed pyramid schemes but that would be a cultural fact not a definitive fact and so if at all it should be referenced in a pop,cultural or anecdotal section. Also I believe I have come across a program that I myself would consider a legalized pyramid scheme(I do not cite it here because I am no expert and would not want to defame or characterize it as such publicly.) Yet, If it turns out to be legal and still economically definable as a pyramid scheme would it then still be classifiable on wikipedia/or wictionary as a pyramid scheme? I think this raises one question that must be answered for the sake of wikipedia, ARE Pyramid schemes to be defined based solely as a systemic, finance structural,and or economic phenomenon that can be identified by economy experts and mathematicians? Will the programs' legal statuses be a major part of the definition of what is a pyramid scheme(eg if the U.S. supreme court rules it to be a pyramid scheme does that definitively make it true to be a pyramid scheme academically?) Also will the theorized impact of the model upon the general economy of their operating centers be included in the definition as well(It does seem to some at least of those who discuss it, to be an important aspect of the overall definition of the phenomenon.) How important are backgrounds of the people who design them to be considered in the definition(again some people seem to think this matters.) I guess the big question in my mind comes to this. IS "Pyramid Scheme" a legal term, an economic industry term, a layman term used to describe something systemic,a mathematical/statistical term, or a business/financial/investing plan or model like a limited liability companies,franchises,stock options,investment clubs etc. I hypothesize that IF it is to be some definition that encompasses all of these subjects then the term will be limited and quite specific. In other words the more definition terms applied to this subject then probably the less existing or previously existing examples we will be able to cite in its definitive articles.71.239.189.97 (talk) 02:33, 6 April 2009 (UTC)
I'm currently working on a legal / business definition of a pyramid scheme, for the sake of improving this article. So far, there appears to be three main factors...
- no real product - the cash goes up the chain - only those at or close to the top get rich, and the majority lose out.
Currently, a search on "cash gifting" is redirected to this pyramid scheme article, and I think this is erroneous because cash gifting set-ups (at least the better ones) satisfies only one of the above three criteria for a pyramid scheme.
There is no real product in cash gifting, just like a pyramid scheme. However, there is no huge amount of cash that goes up the chain, and it is thereby impossible for only the top few to get rich; indeed, there is no real 'top' at all!
The better cash gifting schemes that I've researched (from an academic viewpoint) work like this...
John sends an invitation to join to Sara. Sara can choose the amount she comes in at - that amount affects how much she can receive in the future. She chooses the $1,500 level. Sara sends $1,250 to John as a gift, with no strings or expectations attached. And she sends the other $250 to Pete, who invited John originally. Sara sends no more payments, and she gets the bulk of any gift sent by someone she invites. Pete gets a small percentage of the total gift made my anyone John invites. And John gets a small percentage of the total gift made by anyone Sara invites.
In other words, the payments made are generally one-off, and the levels up the payments go are limited to 2. In the above transaction, the person who brought in Pete gets nothing, and nor do any of the people "above" him. The only payment made to the 'top' or the 'centre' is a annual admin fee, which should be fairly modest ($50-100).
This may seem a small distinction, but I believe it to be an important one. We may or may not like the idea of people sending cash gifts to other people within a structure, in the hope of getting more back than they put in, but it is a legitimate activity, OK'd by the US courts, and therefore deserves an article of it's own. Any takers??
The connection of Pyramid scheme to Multi-level marketing needs to be explored a little more than just having it in the intro.--BruceGrubb (talk) 17:52, 4 March 2010 (UTC)
(remove indent)Insider20128, given the past COI issues regarding particular MLMs you have had as demonstrated on you talk page this 'they don't know what they are talking about because it doesn't agree with my view' song and dance isn't going to work. Either find reliable sources that directly challenge Carroll, Coenen, Ogunjobi, and Salinger or stop wasting our time.--BruceGrubb (talk) 11:28, 15 March 2010 (UTC)
(remove indent) Considering the Wiley book I am citing is supported by a book by Sage and another one by Greenwood Press one of which was the same year as Rubino's book and the other post dates it and is "highly recommended for large high school, most public, and all college or university libraries" by the American Reference Books Annual it is clear you are blowing smoke. Frankel in his 2005 "Trust and Honesty: America's Business Culture at a Crossroad " published by no less then Oxford University Press talks about pyramid schemes both legal (calling them pyramid type) and illegal from pg 64 to 66. Current developments in monetary and financial law (1999) put out by the International Monetary Fund on pages 421-436 shows the problems with separating pyramid schemes from MLM especially in point 5 which could and can still be applied to many an MLM. All keeping up the nonsense does is get me to seek out and find even more reliable sources.--BruceGrubb (talk) 04:27, 18 March 2010 (UTC)
(Remove indent)Insider201283, you really need to actually READ WP:SYN: "If one reliable source says A, and another reliable source says B, do not join A and B together to imply a conclusion C that is not mentioned by either of the sources." You are doing exactly that.--BruceGrubb (talk) 11:26, 22 March 2010 (UTC)
Pyramid Selling Schemes
55.1 (1) ... "scheme of pyramid selling" means a multi-level marketing plan whereby
(a) a participant in the plan gives consideration for the right to receive compensation by reason of the recruitment into the plan of another participant in the plan who gives consideration for the same right; (b) a participant in the plan gives consideration, as a condition of participating in the plan, for a specified amount of the product, other than a specified amount of the product that is bought at the seller's cost price for the purpose only of facilitating sales; (c) a person knowingly supplies the product to a participant in the plan in an amount that is commercially unreasonable; or (d) a participant in the plan who is supplied with the product (i) does not have a buy-back guarantee that is exercisable on reasonable commercial terms or a right to return the product in saleable condition on reasonable commercial terms, or (ii) is not informed of the existence of the guarantee or right and the manner in which it can be exercised.
(remove indent)Sorry Insider201283, but those would be under Wikipedia:PRIMARY sources and you know that interpretations must come from WP:SECONDARY sources like the Times (not to be confused with the Sunday Times which is a totally different paper published by the same publisher)--BruceGrubb (talk) 10:55, 23 March 2010 (UTC)
(edit conflict)
"Operation of a pyramid scheme constitutes fraud for purposes of S 12(2) of the Securities Act of 1933, S 10 of the Securities Exchange Act of 1934 and various RICO predicate acts.[...] The Federal Trade Commission has established a test for determining what constitutes a pyramid scheme. Such contrivances are characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users. Id. (emphasis in original). The satisfaction of the second element of the Koscot test is the sine qua non of a pyramid scheme: "As is apparent, the presence of this second element, recruitment with rewards unrelated to product sales, is nothing more than an elaborate chain letter device in which individuals who pay a valuable consideration with the expectation of recouping it to some degree via recruitment are bound to be disappointed." Id. We adopt the Koscot standard here and hold that the operation of a pyramid scheme constitutes fraud for purposes of several federal antifraud statutes." When quoted in context the case shows that that only the second part of the FTC guidelines is being applied here. The "right to sell a product" part is not really addressed here so the case does not say what you claim it says. Besides you can NOT draw conclusions from your primary source of WEBSTER v OMNITRITION, No. 94-16477 'only quote from it directly: "Operation of a pyramid scheme constitutes fraud for purposes of S 12(2) of the Securities Act of 1933, S 10 of the Securities Exchange Act of 1934 and various RICO predicate acts.[...] The Federal Trade Commission has established a test for determining what constitutes a pyramid scheme. Such contrivances are characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users. Id. (emphasis in original). The satisfaction of the second element of the Koscot test is the sine qua non of a pyramid scheme: "As is apparent, the presence of this second element, recruitment with rewards unrelated to product sales, is nothing more than an elaborate chain letter device in which individuals who pay a valuable consideration with the expectation of recouping it to some degree via recruitment are bound to be disappointed." Id. We adopt the Koscot standard here and hold that the operation of a pyramid scheme constitutes fraud for purposes of several federal antifraud statutes." When quoted in context the case shows that that only the second part of the FTC guidelines is being applies here. The "right to sell a product" part is not really addressed here so the case does not say what you claim it says.
(remove indent)You're avoiding the issue, Insider201283, as the FTC's position of "Retail Sales do not include sales made by participants in a prohibited marketing scheme or multi-level marketing program to other participants or recruits in that scheme or program or to such a participants' own accounts" (FTC vs Mall Ventures) would make many so called legal MLMs pyramid schemes as their main consumers are "other participants or recruits in that scheme or program". IE for something to be called a retail sale by the standard set forth in FTC vs Mall Ventures it must be to someone outside the MLM. We are also waiting for that source tha proves directly and expressly that Wiley, Sage, Greenwood Press, and Oxford University Press don't know what they are talking about; so far we have seen nothing but rhetoric, out of date references, and WP:SYN galore.--BruceGrubb (talk) 07:48, 26 March 2010 (UTC)
(remove indent)Insider201283, you are still missing the point. The United States Federal Trade Commission talks about "illegal Pyramid schemes" which as I have pointed out before is redundant if all Pyramid schemes are illegal ergo there much be legal Pyramid schemes otherwise the word "illegal" wouldn't be there in the first place. The Royal Canadian Mounted Police page was demonstrated to have cited the wrong bloody law making you wonder if the guy running their web page know what they are doing, [Australia's definition of Pyramid scheme is broader than the US http://www.ratbags.com/rsoles/comment/acccpyramid1.pdf]; Virtual Office Survival Handbook (1996) and Refugee Communities (1991) are way older than the references I am using; the PNG fact book is only a snippet that end ends at "often disguised as" which leave too much of the definition out there. Frankel, Tamar (2005) "A pyramid scheme combines two usual and legitimate transactions to create an unusual sales force of a third, illegal kind." "The illegal pyramid scheme serves to “market” marketing. Most buyers are future distributors." Trust and Honesty: America's Business Culture at a Crossroad Oxford University Press is saying what the others are saying. Clearly you are just doing random google searches and throwing whatever come up regardless of how old it is or if it really expressly and directly contradicts the point the other reliable sources raise (which none of your sources do). Furthermore in "Full committee hearing legislation updating improving SBA's investment surety bond programs" Volume 1, Issues 110-144 put out by the United States Congress regarding Build-a-Bear I will quote: "Mr Mercer. It is just a legal pyramid scheme Mr. Chabot. One that has worked quite effectively, at least in my house." No correction that there are no such things as legal pyramid schemes but an acceptance that there are such things and that this particular one had worked quite well in his own house. There you are, admission on the floor of the United States Congress from Steve Mercer a US Congressman during a Full committee hearing that not only there are legal pyramid scheme but by his own words "one that has worked quite effectively, at least in my house" Give it up, Insider201283, and stop wasting our time with this nonsense that is either WP:OR or WP:SYN. To quote Welch to Joseph McCarthy "Have you no sense of decency, sir? At long last, have you left no sense of decency?"--BruceGrubb (talk) 10:21, 29 March 2010 (UTC)
If anyone has the time, a section on Albania post-Communism would be a good addition to the article. (I know I am welcome to do it myself, and I may, but right now time is tight.) There were entire cities in revolt after a huge number of people lost everything in a number of large pyramid schemes. It is mentioned on an Albanian history page, but no details are given. Boomcoach (talk) 15:48, 18 March 2010 (UTC)
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