The latest version of the ponzi/pyramid schemes?

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mercalia
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Joined: 22 Sep 2013, 10:03pm
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The latest version of the ponzi/pyramid schemes?

Post by mercalia »

As the video says they are illegal but it seems that the ones in the video entrap many women but just void being illegal

The idea is you join a company to sell product A, you recruit x,y,z to sell the product and you get a percentage of their earnings, x,y,z do the same a,b,c and you get s percentage of a,b & c's earning also ( I think )

http://www.bbc.co.uk/news/av/stories-43049230/hun-this-could-be-your-opportunity-to-get-rich
thirdcrank
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Re: The latest version of the ponzi/pyramid schemes?

Post by thirdcrank »

FWIW, I don't think pyramid selling and Ponzi schemes are the same thing.

Pyramid selling is really only a version of how a lot of goods are distributed through wholesalers and retailers but the people who are recruited as / conned into believing they are retailers are more often than not purchasers because they have no market for the goods.

A Ponzi scheme is a pseudo investment, where new deposits are used to pay the interest on older deposits, without any underlying investment. It "works" while it's expanding and inevitably collapses as soon as it stops expanding because some "investors" try to make withdrawals when there's little to withdraw.
mercalia
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Re: The latest version of the ponzi/pyramid schemes?

Post by mercalia »

thirdcrank wrote:FWIW, I don't think pyramid selling and Ponzi schemes are the same thing.

Pyramid selling is really only a version of how a lot of goods are distributed through wholesalers and retailers but the people who are recruited as / conned into believing they are retailers are more often than not purchasers because they have no market for the goods.

A Ponzi scheme is a pseudo investment, where new deposits are used to pay the interest on older deposits, without any underlying investment. It "works" while it's expanding and inevitably collapses as soon as it stops expanding because some "investors" try to make withdrawals when there's little to withdraw.


well there is a comparison as it seems that some are just not selling stuff but relying onrecruiting people who recruit others and thus get money that way.
hamster
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Re: The latest version of the ponzi/pyramid schemes?

Post by hamster »

Correct, a fair few pyramid selling companies use things like joining and training fees to push money up the tree, at which point they become indistinguishable from ponzi schemes .
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bovlomov
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Re: The latest version of the ponzi/pyramid schemes?

Post by bovlomov »

As far as I remember, the difference between legal and illegal is whether there is a product.

Plenty of questionable health and beauty products are sold with a similar business model, but they are legal because there is a product at the end of it - even the mug holding the box can't shift it at the price s/he has paid.

True pyramid schemes have no product, and the whole thing is only kept afloat by the gullibility of the next layer of suckers. Someone I knew got involved in this one, and tried recruiting among his work colleagues. Luckily the boss put a stop to it before any damage was done.
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