The internet is full of ways to make “easy money.” Oftentimes, these opportunities involve signing up others who pay a fee. While some situations have some value in that they actually give you something for your money, others are little more than a pyramid scheme.
Pyramid schemes have been around since long before the internet, but there’s no sign they are going away. Here is how they work:
- You ask, let’s say, 10 people to pay a fee to sign up for your get-rich-quick scheme
- Each of them also needs to recruit 10 people who will pay a fee
- The people they recruit then need to recruit another 10 fee-payers each, and so on
There’s no real product or means of income here. The only income comes from people signing up for the scheme down the ladder. As soon as that momentum stops, the money will run out, and those who have been most recently recruited will not receive the promised bounties as earlier investors did.
The internet has made it even easier to construct pyramid schemes
Before the internet, running one of these schemes, or partaking in one that was already running, meant knocking on people’s doors, ringing their house phones or paying postage to send out letters. These days the internet allows individuals and bots to reach millions of people at the click of a button for free. Yet all these schemes dry up one day, and someone who signs up might report it to the authorities.
Just because you followed a business idea that you found online does not mean that it is legitimate. Depending on your circumstances, you could potentially face prosecution for fraud if you have facilitated a pyramid scheme. If your intentions were innocent but misguided, you’ll need legal help to show a court that you did not set out to commit fraud.