Here's how to spot a pyramid scheme

Originally published at:



“It’s not a pyramid scheme, it’s a reverse funnel system!”


Pyramid schemes really attract the worst kind of people as ringleaders. I notice that one of the other videos in the series discusses cults, which makes sense since there’s a significant overlap in that Venn diagram of scumbaggery. For example:


The key to having a chance at making a fortune through a pyramid scheme is to be no more than three levels down from the top. Or be the one starting it, although those people are probably going to jail at some point.

When I was an unemployed new father in my early twenties, I came within a gnat’s whisker of falling in with Amway. I know, it’s an MLM “opportunity adventure”, but really. Realllllly. If it looks like a duck and quacks like a duck…

If you aren’t close enough to the top that you can call the owners by their first names without fear, you are the sucker keeping their money machine running.


Darn it. I thought she was going to finally explain how the ancient Egyptians built their massive tombs!


The video barely touched on this, but the rule is simple: If the job is requiring you to put money down to get the job, it’s a scam. They are supposed to be paying you, not the other way around.

You can break this rule if you really know what you’re doing, but if you’re the slightest bit unsure and they ask for a fee before you can work for them just run away.




Betsy DeVos is the daughter-in-law of one of Amway’s founders - why am I not surprised. Scammers marry scammers…


Somewhere in storage I may still have a cassette I found that has what sounds like a pitch for a pyramid scheme, professional-sounding speaker intones:

"This little recording is about facts, not dreams. The person who gave you this recording has much much more of this information, and if you’re a critical thinker who knows how to evaluate facts, and the timing is right in your life, this is the one break you’ve been waiting for. . . "


Every pyramid scheme has a canned blurb ready to explain to people why they aren’t a pyramid scheme. Some of the ballsier ones will lead with it.




A lot of those Midlevel Marketing schemes seem a lot like pyramid schemes to me. When I lost my job due to the company closing a while back, I got called in to two job interviews (AFLAC and GoSmallBiz) that run along those lines. You’ll have a mentor to walk you through the sales process, then when you’re successful enough you get to mentor people under you, which gets you a portion of their sales… plus as an “independent contractor,” the companies aren’t obliged to put up health care or other benefits.

It isn’t illegal, AFAIK, but unless you’re a superlative salesperson with a ton of contacts, I’m not sure how well it works out in the long run. Since I didn’t feel like I was either of those things, I passed on both… but I understand how tempting their pitches can be.


I encountered a crazy one in L.A. They said the gov’t agencies were desperately in need of compost worms and would be paying top dollar to deal with the green waste. So you buy in for $5K or whatever, they give you a plywood box with a screen and some worms and they promise to buy them back after you breed a bunch of them. I brought the king of compost with me and asked them “well, what if we buy in and bring you a billion worms tomorrow?”

“No, they have to be our worms.”

They tried to pawn off their red wigglers as a different subspecies that would eat more. Their sales/pitch people had done so many other schemes, they were dolled up like real estate agents and literally afraid to touch the worms.


It’s been interesting (infuriating?) to see the pyramid schemes of the social media era (shit to put on your fingernails! shakes to make you poop more! or less!) dovetail with the new-age self-help bullshit industry selling the same Secret-ish bullshit about creating your own reality through the power of delusion. It’s so goddamn stupid.


One of the red flags of MLM schemes is if they seem to be selling product only to themselves. If outsiders can’t buy the product then you’ll be forever trapped trying to recruit new people so you can sell them the goods.


(slight derailment) What is that from?


Caitlin Doughty’s “Ask a Mortician” youtube channel…

Not sure which specific one, though.

Here is the most recent video, a visit to the site of the Donner Party:



It’s why I don’t expect the FTC, under this administration, to put much effort into cracking down on them.

You know how certain topics (e.g. regarding certain Canadian professors) on the BBS will bring in a bunch of new accounts accusing us of being close-minded losers? That happened on the Okayplayer boards when someone there asked about ACN. The newcomers were trotting out Donald Trump’s personal involvement like it was supposed to somehow not repulse us (and this was 13 years ago). (My retort)

Isn’t doTerra an MLM? :stuck_out_tongue_winking_eye:

ETA: my previous rant


Ahhhh! I thought I recognized her. I haven’t watched that since a few episodes after it started. I should find some time to catch up.

(edit) Oh damn. That will take awhile.