Pyramid Schemes
 

I'm venting here, but does this just happen to me or has it happened to some of you too. I get approached by pyramid scheme morons a lot and it gets on my effing nerves! When I'm not studying or on my lap top I like reading the Better Home magazines, and someone will come over and start talking to me about the magazine and what I'm reading about, and the whole time I'm thinking it's someone who's trying to have a nice conversation with me. Come to find out he/she is trying to sell me something. They'll ask "Wouldn't you like to have a home like that" or whatever:rolleyes: I told him no thanks, I'm not interested, but they're so persistent. This guy tried to give me his number incase I changed my mind. I took it and threw it away. That happened about 6 months to a year ago, and the same guy gave me the same line again when I came back. He didn't remember me from the 1st time. I cut him off and reminded him about the last time he tried to sell me this crap.

Then Amway! That whole McDonalds BS! I often wonder is it certain people they prey on or what, but it's so annoying.

Does this happen to anyone besides me? I know it's a stupid thread, but I'm just curious to know.

I almost got sucked into the Prepaid Legal one. One of my line brothers knew a guy "who worked in marketing," so I met up with him to do some networking. Well, our meeting ended up being a sales presentation. It was very awkward, so I left as soon as I could.

Now, my big brother (in the fraternity) is involved in one and will NOT take no for an answer. Every phone call I get is "Hey, how are you? How's school? How's life? Good. Listen...if you're not busy today, my company (never gives a name :rolleyes:) is having a meeting. No pressure at all; we just want to give you some information!"

I've since stop answering his phone calls :p

Yeah, I've had an ex-boyfriend PM me to check out his "business".. some kind of juice or vitamin supplement or something. Primerica fooled me into going to one of their presentations. My idiot ex-husband invited an Amway couple into our home once. The worse the economy gets, the worse this kind of thing gets, I think. People think "Well gee, I was laid off, but I can have my own business!" or "If I have a side business, I can pay off those credit cards with all that extra money!" Preying on the weak.. that's what they're about!

Scamway!!!! :eek:

^^^ That reminds me of one of my current co-workers. He's doing the online grocery thing too, so any time he sees me with an energy drink or soda, he'll throw out that same pitch. He's also tried to reel me in by offering to give me free samples of the groceries/drinks that he sells.

So basically, it's a brand that I'm not familiar with at the same (or higher) cost and shipping fees. Which is very stupid.

But he still asks :mad:

I once dated a guy who got into and out of Amway before I met him. He and his ex Wife met at one of their convensions (whatever they were called). It was a real big deal.

After they were married, she insisted that they were distributors within her "circle" (WTF). So, he had to leave his circle behind. Then, the top guy in the circle told him that since he didn't have an "emerald" income he couldn't drive the Mercedes that he had (he worked for the dealership and had a company car). They basically told you how to live, who you could socialize with and controlled you life.

My recommendation, if approched by an Amway cult member is...

Ugh, my sister does something like you mentioned KSUViolet06, except it's for organic cleaning supplies, toiletries and vitamins and stuff like that. They require a minimum order every month of something like $45. Yeah, because I'm going to need to spend that much on cleaning supplies every month. I'm one person. And the place requires a default order, so that if you don't place your order by x date of the month they send you the default order. The people above you, who brought you in get a certain dollar amount of commission or whatever of your sales, and they get so much of sales of the people you bring on and on and on.

Does anyone know anything about Ameriprise? When I was in college, they recruited me off Monster.com.... I went to their presentation deal because I figured why not, but decided it wasn't for me...they just seemed like the "ambulence chasers" of the finacial world.

One of my friends... whom I haven't spoke to in awhile, joined them not too long ago, and I happened to see her a few months ago, and now she doesn't leave me alone. Every conversation we have is about "having lunch" but really she just wants me to be one of her clients. I'm a super busy person so we played telephone tag for awhile, but one time she finally answered my phone call and after 20 minutes of random conversation, BAM! She busted out her Ameriprise crap. I've told her already I wasn't interested, but she doesn't stop!!!

Are they on some kind of pyramind scheme? I know they do pretty well if they sell a lot... only because I went to their presentation deal a few years ago.... I would assume their recruiter gets a cut too?

Wow...its crazy that this thread was posted tonight because today is the one year anniversary of my joining a Cashflow to Wealth marketing company...I know there are some useless companies out there but not all of them are....I know more now then I ever I thought I would about my finances and how to break the cycle of debt so many Americans are caught up in...but thats what my company is about..I sometimes get misty thinking what my financial future would have been like without one of my friends introducing me to our system..I was clueless and probably would have had to work until I died....I know some companies try to get you to push huge amounts of household products or what not and other useless stuff...as far as being pushy, I'm not at all when it comes to my business, I feel like this, I mention it to people I feel like can truly understand the concept because IMO everyone who isn't wealthy needs it, but everyone can't and will not be able to grasp it, it takes a great deal of discipline....I guess maybe its because we don't sell anything...this is the first time I've even mentioned it on GC and I post almost everyday...

ETA: businesses formed in a pyramid formation are common...take Mickey Ds for example...corporate is on top, you buy a franchise you fall under the top...you pay a fee and a percentage of your sells go to corporate...its a pyramid structure...every store opened makes up the body of the pyramid...the scheme thing comes in with companies where only the top brackets make any money because the requirements, quotas, or whatever are too difficult to reach for the people in the "body" of the pyramid...

What makes a franchise different than a pyramid is that there is only one level below corporate. Each franchise doesn't try to get others to buy franchises from them to make money off of them. Your own success isn't dependent on how many other people you get to buy franchises. It's only dependent on how well you run your business and if you made a smart business decision in the first place (chose a good location, in an area where there was a need, etc).

Ya lost me here.
I see McDonalds as this:
McDonalds Corporation
Franchises Franchises Franchises

I don't see other middle people here. Only the corp is getting a cut of your profits

Something like, Amway works like this doesn't it? A will be the top person. B is the next person in the line and so on. They all get a cut of E's profits. E needs to bring on more people to make $$.
--A--
B--B--B
C--C--C--C
D--D--D--D--D
E--E--E--E--E--E

Am I wrong with my thinking?

^^^^^^^^^^

true enough which is why I called it a pyramid structure...I used McDonalds only to show that theres a corporate on top and franschises underneath...I guess Mary Kay would be a more appropiate example of the trickle down effect in a pyramid structured business where a person can benefit from the efforts of the people that fall under them...I was only trying to point out that the mere structure wasn't bad, only the companies that make empty promises...at one point Amway made more cash money millionaries then any other company in the US but I don't know if thats still true...as far as their philosphy, I've actually never encountered anyone selling their stuff so I can't speak on it....

anything sold at home parties or through a catalog = pyramid scheme to me. I've quit going to shop-at-home parties that friends and co-workers invite me to. I always feel like I have to buy something and then say "no" to the "start your own business/work at home for extra cash" pitch. Scary Kay, Beauticontrol, PartyLite, Cookie Lee, Tupperware, Southern Living at Home, Pampered Chef....I'm over it!

lol lol lol Nope.:D

Has anyone ever heard of Equinox? It was started by this crook named Bill Gould. I remember I got talked into joining this about 10 years ago. I was young, broke and stupid, but anyway it was a huge scam. Here's how it worked. They sold these supposedly health care products. Hair products, toothpaste, mouth wash, detergent, water purifiers ect ect. They even sold breath freshener.:rolleyes: Anyway, the goal was to move up. In order to move up to the next rank, you had to buy $15,000 worth of products. First off before anyone calls me dumb as a box of rocks, I never stayed in it long enough to buy anything. But anyway you had to buy the $15,000 worth of products and then sell them. Then you would start getting money from the other people you brought into the organization. Same as Amway. One time they told us Bill Gould and some other scam artists were going to be speaking in Atlanta GA, and in order for us to go we had to pay $300.00 to see him speak. They told us that we would need to see him speak in order to be an effective seller. Now this is what was so crazy. I paid the $300.00, or so I thought. I drove down to Atlanta, but I never made it. My car stopped on me, somewhere in Chattanooga TN. I needed an alternator. I ended up finding a mechanic who fixed it. I had to buy the part, but he put it in for only $50.00. He told me he was a Christian and as he was putting the alternator in, we started talking about the Bible. This guy was one of the nicest people I had ever met. The bad thing, at 1st I wasn't uncomfortable, because these were complete strangers to me. On top of that, I don't know why, but my credit card was never charged. The money was available too, but I still don't know why it was never charged. I guess God was looking out for me.:) Listen to this. Once I became a member, they would tell us to make sure we're really into what the speaker was saying in the seminar so the new members would also take interest. They would say "sit forward on the edge of your chair and seem really interested." LOL. No lie. There's no way I could do that. They also talked about how much money they had, but looking at their shoes and attire, I couldn't tell.:rolleyes: To make a long story short, I got out with no money spent. I'll try to find the info on Bill, because he got busted for scamming.:)

Here it is. Read this.
 

After making the #1 spot on the 1996 Inc. 500, multilevel marketer Bill Gouldd slid and folded in a settlement with the Federal Trade Commission.
Legacies
Equinox: Class of 1996
Multilevel marketer slides from top rank and folds in a settlement with the Federal Trade Commission...
...It also prompted Gouldd to file a $10-million lawsuit against the 19 former Equinox distributors and the company they joined, Trek Alliance.
A 10-month investigation by the Federal Trade Commission culminated in a trial that began six months ago in federal district court, in which prosecutors accused Gouldd of operating a fraudulent "pyramid" scheme. As part of the settlement, Gouldd (who never admitted to any wrongdoing) agreed to close Equinox permanently and refrain from working in the multilevel-marketing industry again. The settlement also called for liquidating an estimated $40 million in assets from Equinox and two of its sister companies and from Gouldd himself, with the proceeds earmarked for former Equinox distributors...
...The central charge was that Equinox was operating a pyramid scheme, meaning that it was selling distributors the right to recruit other distributors and rewarding them in ways unrelated to the sale of products to the ultimate users... April 25, 2000 Equinox International Settles Case with FTC, Eight States Nearly $40 Million in Restitution for Alleged Pyramid Victims - Federal Trade Commission Consumers who lost money investing in a pyramid scheme they thought was a legitimate multi-level marketing business, will share in as much as $40 million dollars under the terms of a settlement between the Federal Trade Commission and law enforcement authorities from eight states, and William Gouldd and Equinox International of Las Vegas, Nevada. The settlement also will bar Gouldd from any future involvement in any multi-level marketing scheme, for life, and requires dissolution of Equinox, Advanced Marketing Seminars, Inc. and BG Management, Inc. Gouldd and Equinox faced charges by the FTC and law enforcement authorities from Hawaii, Maryland, Michigan, Nevada, North Carolina, Pennsylvania, Tennessee, and Virginia...

All I know about them is they put fishbowls in restaurants for you to drop your business card to "win a free lunch" for you & your coworkers. Turns out, one of the conditions of the lunch is that an Ameriprise rep comes to your business and gives a talk. I think everyone is starting to get wise to it now.

I have a friend who works for Ameriprise Financial and he's never tried to sell me anything - seems legit to me. He basically helps people buy houses and sets up retirement funds, etc. Financial Planner basically.

I dropped my card in one of those at my favorite local Thai restaurant and got the call from an Ameriprise. I told the guy that I didn't want to listen to his speech. He promised that he would only take 5 minutes of our time. He was true to his word. He gave a short sales pitch and then left me and my co-workers alone for the rest of lunch.

Those pyramid scheme companies prey on recent graduates. I graduated in 2003 when the economy was not so good (similar to what it is now!). It was tough finding a job back then for those of us who had a degree but little experience. Wenworth contacted a friend of mine and asked her to come in for an interview for a marketing position. She was all excited so she put on a suit she just bought for the interview with new shoes and headed over there. As soon as she got to the office, the hiring manager asked her if she had some time to follow around another marketing representative so that she could see what she'd be doing on a daily basis. She said sure. She had no idea what she was in for. It turns out that this job required their sales associates to do door-to-door sales of coupon books in the rural towns in Central Florida. My friend spent all day going door-to-door in her new suit. Keep in mind that it was the summer in Central Florida which means it was 90+ degrees. Then it started pouring but the sales associate wouldn't give up. He still dragged my friend door-to-door in the rain in her new suit which was dry clean only. She was basically held hostage since this sales guy was her ride home. Her "interview" begun that day at 10am and didn't end until 6pm. LOL. I love telling that story because I'll never forget how pissed she was. She called me crying and screaming all at the same time.

I think there was a thread like this a while back and I believe we all determined that Enterprise Rent-a-Car was a pyramid scheme as well.

^^ That ALMOST happened to me. I went for an initial interview with a pledge sister of mine in Atlanta - nice fancy building, etc. Well, it looked like they had just moved in. I was suspicious when the receptionist answered the phone with a name that wasn't the name of the company I was interviewing for and the company (a marketing company) did not have a website!!! So when they told me I would be going with another sales associate the next day to sell coupon books I passed. The guy was trying to make it seem cool since I might be in his position one day (an office full of boxes and an empty desk?? No thanks).

My first experience with a pyramid or MLM as they like to call them was Primerica. Wow, what a joke. I spent a LOT of money trying to make it work, then I realized it was just sucking out of me.

Then for two years I did Mary Kay, just to get a discount on the make-up. I never spent a lot, so it wasn't a big deal.

The lastest "scam" to hit my friends is Monavie. They are WAY into it. It's a juice that comes from the acai berry, and while I admit it's healthful stuff, it comes packaged in a wine bottle, and goes for a little over $40 a bottle.

Everything they do now involves Monavie. It's really sad. Everything has become a "tasting event." Their motto is, drink it, feel it, share it.

They make pretty good income from it (for doing it for two years) but they spend a lot too.

Couple of stories:

1) Ameriprise tried recruiting me off of Monster or Careerbuilder just as soon as I graduated. My major had absolutely NOTHING to do with finance or accounting, or anything numbers/money related. That should have been my first sign.

I went to the initial presentation, and it seemed like they get paid a lot depending on how much they sell. And their recruiters get paid too. After seeing the other people there, and some of the things the guy said in the presentation, it just made me really uneasy and I knew it just wasn't my thing.

2) The fishbowls -- There was a company I worked for a couple of years ago and there were apparently 398293472934 Ameriprise reps in that area. My coworkers all ate out a lot, and every time we went out, they would drop their cards i nthe bowl. I didn't stay at that company long enough to even get business cards, but just about every week one (out of maybe the ten that would eat out regularly) would get selected for one of those presentations. I know it's kinda bad b/c that's how they try to find clients and none of us would ever sign up... but really? I would LOVE to see some ROI data for those fishbowls. I'm sure it can't be that bad otherwise I don't think they would do it very often?

Melaluca. I went to it last year and it sounded pretty good, but like you said I don't need that much crap every month for one person and you had to place an order.

one word: Cutco.

i worked for a pyramid scheme scam in elmsford ny last year. its called child safety innovations inc. its parent company is innovage. they have you go in and learn all this stuff (same stuff every day a lil different so you get brainwashed into beleiving what they say is right) and then go out on the field to sell stuff. your job is to convince people youre selling this stuff for charity and that money actually goes to charities like DARE or toys for tots. when in reality only stuff with the logo of DARE goes to DARE and thats still only 2%. the idiot standing out at a table for hours on end only gets 30% commission of what they sell minus the gas it takes to get there and back. plus you have to get to the office at 7 in the morning and some nights you cant come back til 630 at night and dont end up leaving til about 8 or 9. you make crap and stand in freezing or really hot weather (even rain) to make larry zeiss money. if you work in that office. but this company is everywhere. thank goodness i got out when i did but i know people who are totally brainwashed and still working there a year later.

I'm so glad that someone started this thread on GC because the majority of times I have been forced to go to at-home parties were from sorority sisters where I buy things I don't need from sisters who use the connection to guilt me into the buy. It has gotten out of control and with two sisters who "work" for the same company and when I go to one's party the other tries to use that to make me go to another.

As an active, though, I am actually sad to say that several of my sisters that were put in charge of organizing COB events decided to use the opportunity to turn it into "parties" for their "business." To me, this totally crosses the line. As an active (younger than one of the offending sisters), I honestly didn't think I could say anything without completely insulting their intelligence. I mean, how do you tell someone that their "part-time job" as they call it, is a big scam and they're using it to push away PNMs who might actually be interested in a sisterhood that doesn't guilt others into spending their money for another sister's benefit. Now as an adviser I am committed to making sure that crap doesn't happen. Period.

While "scam" might be a harsh word in comparison to some of the other companies in this thread, I still don't think they are very legitimate. I've watched as several naive friends got caught up into the possibility of making some extra money "while having fun" and ended up spending their savings trying to build up enough inventory to get up and running. Then, after all of their friends had attended an awkward party and bought something, their friends weren't anxious to buy more only 2-3 months later. Then they had to sell everything for whatever they could just to break even.

While the compensation itself might not be a classic pyramid scheme, the fact that friends are encouraged to make their own friends into saleswomen for incentives makes it seem pyramid-like and just a little shady to me.

Maybe my negative attitude comes from some of my acquaintances' perception that I probably have a lot of disposable income and therefore should be coming to every party and able to buy beauty products every other month. While it is probably true for most of my friends that I have slightly more than most (Good job, married to someone with good job, no kids), it doesn't mean that my husband and I don't have our own financial goals (living somewhat frugally to achieve them), in addition to having more student loans (from getting a law degree) than my friends.

I always get asked to these parties... and the most awkward part of the situation isn't actually buying something now that I really think about it. It is the constant reminders that they'd love to host parties at my own home so I can invite other attorney friends from work to come. All of my "attorney friends" happen to be male, but even if they weren't, I still don't think I'd feel comfortable inviting professional friends to my home so that an old college friend can try to squeeze money out of them and pitch them to host their own party (which I would inevitably be first on the invite list for).

I'm saying all this because I'm sure there are women out there reading this who will find themselves wondering whether to start one of these at-home party "businesses." And most I don't think fit into the housewife pitching other housewives to spend their disposable income scenario that KSUViolet just talked about. I think people should think seriously about how these parties will change the dynamics of their friendships and ask yourself how much that is worth before convincing themselves that starting an at-home party business is a source of extra income by providing a needed service for their friends.

In this day and age when most things (including Mary Kay, Avon and Body Shop products) can easily be purchased over the internet, I don't see how people justify starting these "businesses."

If I still lived in my hometown, I wouldn't hesitate to start a Body Shop at Home business. The nearest BS is 70 miles away and I think the products are different enough that it's an option women would like. And I know I personally don't like to buy any type of cosmetic without seeing/smelling/testing it first. I'm guessing other women are the same.

We still have LOTS of rural areas of the country where there isn't a lot of choice and if you want something fancier than Revlon, you're SOL unless you want to drive an hour or plop down lots of $$ on something you've never tried. So I can understand why women still want to do this.

However - you have to proceed cautiously and not allow yourself to get in over your head.

This is a really good point. One I hadn't thought of because my nearest body shop store is less than 5 miles from my home (and the home of a "body shop at-home consultant" friend) . But you're right about wanting to test products out before buying and so for rural areas, this probably is a good thing to try in comparison to some other at-home party businesses.

ETA: Something else problematic about body shop at-home if you're not in a rural area: Body Shop stores themselves often have 20% off days if you sign up for their email list. Couple that with the shipping costs that at-home consultants have to charge, you end up paying about 30% more for products from the at-home parties.

I'm going to strangle the next friend/acquaintance/co-worker who tries to sell me Monavie. :mad:

SERIOUSLY.

I can't believe anyone I'd know would be so stupid as to fall for a scam like that!

I was just rereading this thread since it got bumped and Dee, I had to laugh at this. It sounds like a Seinfeld episode.

It's worse when you meet a nice hot guy through some friends. You dig on him for a few weeks and get all excited because he asks you to dinner one night. You get to dinner, and once drinks are served, he starts reciting the Amway pitch. :mad:

i got caught up in Cutco my freshman year. a floormate of mine swore she make serious money ("fat checks" as she called them) and i went to one of their "presentations." Which was in a random walk-up apartment in midtown. the "CEO" was some dude with a brow ring, wore white socks with his suit and his "office" was--no joke--a walk-in closet.

Vector Marketing, they called it. My roommate pretty much laughed in my face after i told her about my "new job."

and THEN years later (last year actually) my line sister caught me up in Amway/Quixtar. She and her bf (now husband) sell as a team. I dont know if they make serious money off it, but really her schpiels start off the same way: she'll engage in some random conversation, then pull out a generic bag of lemon cookies and offer you some. then talk up about how good they taste and BAM! comes the sell.

and would you believe after i went to the presentation, their up-line was all like "hey you need to go meet the (whatever they call the head honcho) because if she knows who you are then shell tell people about your business. and be sure to mention my name, that will help too."

whatEVER man. she roped another friend in and she was quicker on the scam than i was. she pretty much regurgitated what they told her and she said "that sound like bullisht, because i worked for Ameriprise and its the same concept."

that was totally awkward. would you believe she (and the husband) call me, a year later, asking for the "promotional literature" back? please, like im really gonna go around exposing you guys and your BS business.

Amway/Quixtar has been running commercials around here. It's baffles me. :)

I've seen the Quixstar commericials, they look alike like the AMEX ones in the beginning.

I had a coworker who thought Quixstar was the way to get ahead-I told her, look it up online with the words 60 minutes, that was enough to steer her clearn.

see that really surprises me because i got the impression that it was really hush-hush, either you knew about it or you didnt.