What are warning signs of pyramid schemes?

Here are some signs that the company is operating a pyramid scheme: Your income is based mainly on the number of people you recruit, and the money those new recruits pay to join the company — not on the sales of products to consumers. You’re required to buy lots of inventory.

What is this pyramid scheme on Facebook?

The pyramid schemes, or gifting circles, are usually found on Facebook and Instagram and lure victims by promising huge returns or “gifts”. Users must recruit friends who also part with money, but the schemes eventually collapse, leaving thousands out of pocket.

How do you protect yourself from a pyramid scheme?

Protect yourself

1. Do not let anyone pressure you into making decisions about money or investments – always get independent financial advice.
2. Be wary of schemes or products that claim a guaranteed income.
3. Consider whether the rewards you have been promised are dependent on product sales.

How do I report a pyramid scheme on Facebook?

If you receive an invitation to join a pyramid scheme on social media, report it to Facebook by clicking in the upper righthand corner and selecting “Report post” or “report photo.” Never give your personal information to strangers. This will open you up to identity theft and other scams.

Are pyramid schemes allowed on Facebook?

Stay Safe From Pyramid Schemes on Facebook Pyramid schemes are illegal in many countries because they’re a scam where most of the participants lose money. Meanwhile, MLM businesses can operate in legitimate ways, but don’t end up profitable for the vast majority of people who join them.

Where do I report a pyramid scheme?

If you believe you were invited to join an illegal pyramid scheme, you may notify the consumer protection division of your local district attorney’s office, and file a complaint online with the Attorney General’s office by visiting https://oag.ca.gov/contact/consumer-complaint-against-business-or-company.