Tuesday, August 4, 2009

Pyramid Schemes

Pyramid schemes......Ponzi schemes....we've all heard of them. What exactly are they? A pyramid scheme is something whose payment structure, or compensation plan, resembles a pyramid; every time you recruit somebody, you get a portion of what he or she sells, so the money trickles upwards like a pyramid. Pyramid schemes have a long history, and they are illegal. They are called schemes because they do not involve any products, and the only money that exchanges hands is those who are giving up their money to people above them in exchange for nothing; no products are sold. Therefore, they are not legitimate companies, because they provide no service for the consumer of any kind.

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