Mid-Valley Scam Alert: Pyramid schemes

The pyramid scheme — the OG scam if you will — is today’s topic. Sitcoms, movies and other media often showcase this classic scheme with a naïve character excitedly seizing an opportunity they have no idea is a scam.

We reference pyramid schemes all the time, but do you know how to spot one? Can you differentiate a con artist’s plot from a legitimate multilevel marketing business?

Let’s start with the basics, courtesy of the Federal Trade Commission. A pyramid scheme gets its name from the structure of the scam. It starts with one person at the top who recruits two people below them. Those two people each recruit another few people, who recruit a few more people and so on.

This type of scam usually features selling some sort of product. But there’s a catch. Promoters will tell you that you’ll get rich quick, but in reality, you’re designed to fail.

Your income won’t come from directly selling the product. Instead, your income will be determined by how many people you recruit into the…