Illegal in the UK
Pyramid schemes were made illegal in the UK as a result of the Trading Schemes Regulations of 1997 and the Trading Schemes Act 1996. This legislation was put in place in an attempt to stop pyramid selling.

What is pyramid selling?
Pyramid selling is the name given to any trading scheme which offers monetary rewards solely for the recruitment of others. These organisations do not offer a real opportunity to make money through the distribution or sale of products and services and participants only make money by getting others involved in the scheme.

Why is it illegal?
After many high profile cases in the UK and abroad legislation was put in place to outlaw such schemes. They were outlawed simply because it's impossible for the majority of participants to make money and the pyramid inevitably collapses.

Due to the way pyramid trading schemes work participants can't make money by promoting a product or service and must recruit others to make money. Typically a participant makes a large up front payment to join such a scheme, they are then instructed to recruit people to see a return on their investment.

Unsustainable model
If each participant had to recruit 6 others to get their money back this quickly becomes unsustainable, because at the 10th level of the pyramid there would need to be 60 million people involved for the people at the 9th level to see a return on their investment. This is the entire UK population including every man, woman and child.

At the 13th level of the pyramid there would need to be 13 billion people involved for the people at the 12th level to see a return on their investment. This is twice the population of the world!

Ultimately, the result of pyramid schemes are always that the vast majority of the participants lose their money and those at the top of the pyramid are prosecuted.

Gifting & chain letters
Gifting schemes and chain letters are examples of pyramid schemes and should be avoided and reported to the authorities. Gifting involves sending money to names selected from a list and adding your name to the list to encourage others to give money to you. Gifting schemes and chain letters work in a very similar way and can be considered illegal lotteries as they are a distribution of money by chance for commercial gain.

Is it legal to make money by recruiting others?
Yes, it is perfectly legal to make money by recruiting others into a business and to earn money based on their sales, this can be a major contributing factor for building a long-term residual income. However, the business must offer a viable way to make money through the promotion of goods or services without the need to recruit others.

Beware of sham products and services
Due to the legislation outlawing trading schemes that offer no product or service, most pyramid selling schemes have adapted to offer products or services with little or no real value or cost in production. These can sometimes be internet courses, eBooks, 'online systems' or training. These are typically one-off purchases and have no prospect of repeat orders.

In contrast with tangible, physical products these virtual goods have little or no real cost to produce with no major infrastructure required and therefore have little value. Although they may be advertised as 'worth £995!' they often include hints and tips which can be gathered for free on the Internet or in books available at your local library.

Not all internet training courses and eBooks are fronts for illegal trading schemes but these are certainly higher risk. All opportunities promoted involve the sale of tangible products or a popular service.

Avoid pyramid selling scams
None of the income opportunities offered by are pyramid selling schemes. All opportunities offer a realistic, proven way of making money through the promotion of a product or service with real demand, to learn more call us on 0845 238 3784.