Being in the industry that I’m in I get the “P” concern fairly normally. Its dropped normally in regards to illegal activity because most people do assume that if an opportunity is not a “job” its automatically a “Pyramid Scheme” and they don’t know how else to describe an opportunity they think would be against the law.
Pyramids are illegal when money flows up to the top of the chain of people/organizations but does not flow back down to employees, investors etc. The world is full of legal pyramids. Our jobs would fit into this category. All of the people at the top make a good amount of money from the efforts of people lower than them, but there is money that trickles down to the employees in the form of an income. That’s legal.
Just today the Federal Trade Commission placed a hold on all of the assets of a fairly well known “Network Marketing” company, Fortune High Tech Marketing. Also known as FHTM, the company allowed representatives to make money by selling services such as Dish Network, Frontpoint Home Security, Various cellular phone services as well as the company’s exclusive home and beauty lines. According to Attorney General Jack Conway:
“This is the beginning of the end for one of the most prolific pyramid schemes operating in North America…This is a classic pyramid scheme in every sense of the word. The vast majority of people, more than 90 percent, who bought in to FHTM lost their money.”
The FTC press release goes on to state:
To participate in the scheme, consumers paid annual fees ranging from $100 to $300. To qualify for sales commissions and recruiting bonuses, they had to pay an extra $130 to $400 per month and agree to a continuity plan that billed them monthly for products unless they canceled the plan.
The FTC press release can be found here: http://www.robbevans.com/pdf/fortuneftcnewsrel01.pdf
The FHTM website redirects to an attorney’s website who seems to be handling the freezing of assets etc. To be fair, this is a lawsuit that has been placed in federal court by the FTC due to the amount of findings of people who have lost a large amount of money. There is no decision by the courts at this time and it could come through that FHTM comes through as a legal enterprise. However it just confirms how careful one should be when checking out Network Marketing opportunities. Normally if there is not an education and qualification process and someone is looking to get you through a ‘hype up – sign up’ deal I recommend that you walk away. If you go to a business presentation where they are looking to sign you up at the end of the meeting – walk away. Run if necessary.
Lastly, the ongoing tenure of the company should be a huge part in a decision to start your own enterprise. That and the people who you are looking at to coach and mentor you as you grow in your business should be a huge concern when you are looking at any opportunity.
I’m so very lucky and fortunate to be linked up with a rock solid servicing company and to be in business with some amazing people full of integrity and honesty. I hope the same for you if you look to start your own side business.