The difference between an MLM and a pyramid scheme

| Nov 19, 2020 | White Collar Crimes |

Many people have searched for jobs in New York and stumbled upon online job positions that look appealing. Sometimes, the job offers are legitimate and offer the chance to work from home while recruiting other employees. But other times, the job offer is actually a thinly veiled pyramid scheme. Here’s how you can recognize the difference.

What’s the difference between MLM and a pyramid scheme?

A multi-level marketing business, or MLM, is a legitimate business that involves selling products to other people. You can also recruit new employees and receive a percentage of the sales that they make. At first glance, pyramid schemes look similar. But you want to stay away from anything that resembles a pyramid scheme. Not only are they a waste of time and money, but they’re also a form of white-collar crime.

Pyramid schemes typically require you to spend a lot of money up front by buying large amounts of product. Once you’ve done this, you might realize that the product is nearly impossible to sell because there’s no consumer demand. Additionally, pyramid schemes put more emphasis on recruiting new salespeople than actually selling the product. The people behind the scheme are more concerned with making quick profits by charging massive startup costs.

What should you do if you’re charged with a white-collar crime?

If you run a business, you might fall victim to accusations of white-collar crime. Someone could accuse you of fraud, embezzlement, identity theft, insider trading or other crimes that come with serious charges. You may wish to have an attorney on your team. An attorney might help you protect yourself and your business from these allegations.