Pyramid Marketing Schemes & Scams That Are Rocking America

If your mother was anything like my mother, she said to you at least once a week: “If it sounds too good to be true, then it probably is.”

If you are currently in the job market, then you will do well to remember that particular saying, and avoid career opportunities that promise instant wealth with no strings attached. Most of these businesses are fraudulent companies that make money off na�¯ve individuals who are trusting enough to invest in their product or service.

There was an episode of King of Queens that dealt with this type of business. Doug, one of the main characters, was convinced by one of his friends to participate in a pyramid marketing scheme where he had to invest a large sum of money in order to sell water purifiers and recruit new employees. By the end of the show, he was left with fifty water purifiers, no downline, and he was out two thousand bucks.

Believe me, that’s typical when it comes to get-rich-quick schemes.

Other people have lost even more money. A Floridian woman by the name of Marcie Stoves invested in a Multi-Level Marketing company in Miami two years ago. She was told by the managers of the company that she would make up to $8,000 her first week selling women’s purses on the streets of Dade County. With a baby on the way and her husband out of work, she signed on as an independent contractor, and ended up losing her house, her car, and all of her savings working for this so-called “Miracle Company.”

In Arlington, Texas, a similar situation occurred with a twenty-two-year-old college graduate named Mark. He answered a newspaper advertisement for office managers and ended up in the middle of a Pyramid Marketing scam. The company owners insisted that if he stuck with it, he would make six figures a year and be able to support the lifestyle that he’d always wanted by selling men’s and women’s fragrances business-to-business. He was arrested once for soliciting without a license, and then ended up stranded in Texarkana with a broken-down vehicle and no way to get home. He is currently pursuing a lawsuit against Scentura Creations, the main Distribution Company, but chances are that he won’t recover a dime.

The fact is that the world has opened up a whole new marketplace for con artists and scammers who will make money off of their businesses, but whose employees or contractors will fail miserably. A Pyramid Scheme, for instance, is build just like a pyramid. You create downlines by recruiting new employees, and you make money off of their sales and their recruits. Eventually, the line is burned because there is no one else to recruit, and the shoddy product simply won’t sell. With the help of and consumer advocates like Tom Martino, the general public is becoming wise to these scams and aren’t throwing away money like they did in the beginning.

Unfortunately, however, there are still risks because unwary job seekers are desperate to find work, and they don’t realize that they’ve been had until it’s too late. They wind up with less money than they had when they started, and back at square one as far as the job hunt is concerned.

There are ways to protect yourself against falling for one of these scams, and you should do your best to investigate the positions for which you are applying, and to ask questions during the hiring process.

1. Marketing Positions

There are tons of legitimate marketing opportunities available across the United States. Marketing and sales are two of the economy’s largest industries, and they pay very well if you are good at your job. Some people make excellent salesmen, and others do not, so if you enjoy sales and you have superior people skills, then don’t hesitate to pursue a job in marketing. Just be careful whom you work with.

First of all, don’t pay money to work. A company that requires an investment to be hired is probably not legitimate, and they make most of their income through the recruitment of new employees. Beware of any company who asks for a “training fee” or a “background check fee” or a “startup fee” because they are probably trying to scam you.

Also, make sure that you are guaranteed a particular salary. If you are working from commission, ask yourself whether or not you will be able to effectively sell the product. If not, you’d better look elsewhere. Legitimate companies will usually offer a base salary + commission, which ensures a weekly paycheck while giving you room to increase your earnings. Others will give you a base salary for three months or so to allow you to learn the job, and then move you to commission only.

It is not inappropriate for you to investigate the company, either. Ask to speak with the head of human resources, and to the owner of the company. You can also request to see annual income reports from their other employees. There is nothing wrong with protecting your own interests.

2. Stuffing Envelopes

Let’s think about this logically. We live in the ‘Technological Age,’ right? There are computers and devices and machines for everything, from assembling cars to canning tomatoes. Do you really think that a company doesn’t have a machine to stuff envelopes?

It is important to use common sense where this is concerned, and ask appropriate questions. A perfectly valid one is, “Why are you paying me ten dollars for every envelope I stuff when a machine can do it for free?” It would certainly be more cost effective to buy a $2,000 machine than to pay hundreds of employees to do the work themselves.

Trust me, there’s always a catch.

3. Work-At-Home Data Entry Specialists

Let me get this straight: a company is going to pay you $50/hour to sit at home and enter data into text fields, rather than hiring an in house entry level administrative assistant for $8.00/hour? That makes no sense! They will claim that huge corporations use their services to outsource data entry personnel, companies like Continental, Target, Microsoft, and Dell. Don’t you think that enormous companies like those have their own staff?

They will try to hook you by saying that you have to pay $99.00 (or whatever fixed amount) to gain access to these companies’ job postings. It’s a scam!

4. Insurance/Energy/Utility Companies

We all know that most large metropolitan areas have several insurance, energy, and utility companies, which all compete for the best prices and the most customers. Most of the smaller companies are hurting for customers pretty badly, and since they don’t have a whole lot of capital, they are forced to resort to scams to hire employees.

One energy company that I know of in Baltimore has been guilty of this for the last two years. They “hire” independent contractors to set up their own websites and recruit both customers and new employees. They are paid by commission only, and small commissions at that.

The catch?

They have to pay $300.00 to even become a contractor, plus $27.99 each month to host their personal website!

This is an example of an illegitimate company that is scraping to get by and has no choice but to look to employees to generate profit. It isn’t worth it. Trust me.

As you can see, there are a multitude of companies out there who are only looking out for themselves, and who want nothing more than to scam na�¯ve, young, inexperienced people into giving up their savings and working for pennies. I

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