Pyramid schemes—also referred to as franchise fraud or chain referral schemes—are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular …

Jan 9, 2026 · A pyramid scheme is a fraudulent investment scheme in which participants make money primarily by recruiting new investors rather than through legitimate business activity or the sale of …

When fraudsters attempt to make money solely by recruiting new participants into a program, that is a pyramid scheme, and there is only one possible mathematical result – collapse. Imagine if one …

A pyramid scheme is a fraudulent business model that seeks to funnel revenue from recruited members to the scheme’s organizers by promising payments to members for recruiting new participants.

A pyramid scheme is a channelized system of recruiting members and promising them huge returns if they hire new participants and obtain entrance fees from them.

Sep 1, 2023 · A pyramid scheme is an illegal business model that promises participants high returns through recruiting others to join the scheme, rather than by selling products or services.

Nov 29, 2025 · Define pyramid schemes, learn the key differences from legitimate business models, and identify the red flags of financial fraud. A pyramid scheme is a fraudulent business model that …

A pyramid scheme is an unsustainable, illegal business model where investment returns are typically from the principal of investments or membership fees instead of from the underlying investment …

Jan 26, 2026 · The meaning of PYRAMID SCHEME is a usually illegal operation in which participants pay to join and profit mainly from payments made by subsequent participants.

Under a pyramid scheme, distributors' profits come mostly from recruitment, not from selling products to customers.