4 Ways to Spot a Pyramid Scheme

How to Spot a Pyramid Scheme

You can easily spot a pyramid scheme upon recruitment. If you ever got an invite from someone to join the company as one of them, you will know immediately if they already got sucked into a cult-like organization.

You can determine a pyramid scheme if:

1. The company charges a large sum for the membership fee

For you to be a part of the company, they will first ask you to invest money that will cover the startup kit, membership fee, and also the products that you can choose whether to sell or to use. That abundant package will definitely cost a fortune.

For instance, one religious corporation in the Philippines, Kapa-Community has been filed a complaint against the Securities and Exchange Commission or SEC for allegedly engaging in an investment scam.

The SEC justified that under the scheme, they “enticed the public to ‘donate’ at least PHP 10,000 in exchange for a 30% monthly ‘blessing’ or ‘love gift’ for life, without having to do anything other than invest and wait for the payout.”

For PHP 3,000/month for life, the people trusted Kapa-Community as they held onto the littlest hope that they gave them in exchange for a huge amount of money.

2. The company promises high returns on your investments

They will likely tell you to invest more because the higher the amount you invest, the higher your returns will be.

That might be the case for some investment corporations but these companies are supposed to run as business incorporation and they do not depend on investments. Their profits were supposedly coming from their business and not from the money they are getting from the people they have recruited.

3. The company promises high returns for your recruits

The more people you recruit, the higher your commission will be, that is what the company promises its members for them to be encouraged to recruit. The members will then prioritize recruiting people than sell products the way they’re supposed to.

However, aside from the fact that recruiting is not that easy, and even if you did, the commission that you will get might not be close to how much that you have already spent since joining.

4. There are no so-called “products” in the first place

The products that the company is offering for the members to sell might just be another scheme. They will tell the members to sell this-and-that to people when in fact, there are no products at all.

It’s important to be mindful of these kinds of situations. In times of financial emergencies, it’s important to know first how to find financial support from institutions where you feel safe and secure.

Take your time to benchmark your options and look for more information from Securities and Exchange Commission for example. Gather all the information and research about what you’re getting into, because it’s better to be cautious than to make rash decisions when it comes to money.

When you need safe and secure financial assistance for your housing repairs, tuition fees, medical bills and other financial emergency needs, Uploan can provide you the safety net that you need.

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