Pyramid schemes are a type of scam that has been around for many years, but keeps popping up and scamming unsuspecting victims taken in both by their lack of skepticism and an abundance of greed, which is a profitable combination for scam artists. The latest version of this scam is now using Snapchat as a way of luring people into the scam and because Snapchat is primarily used by high school students, college students and other millenials, many of them have never heard of pyramid schemes.
Pyramid schemes are disguised as purported businesses, however, if you carefully evaluate the business you will see that the primary source of profit for the business is in enrolling new members who pay fees to join the business.  The only profit for investors comes from bringing more people into the scheme.  In other words, the only way you can make a profit is by becoming a scammer yourself.  Like the chain letter, pyramid schemes are doomed to failure because eventually you run out of people to sustain the growth of the pyramid. The new pyramid scheme appearing on Snapchat uses the catchphrase “crowd funding” to make it appear legitimate, but the essence of the scam is that you are pay an entrance fee using the Snapchat payment system, Snapcash to join the company and then are told that you will be paid a fee from everyone else joining as you are encouraged to spread the scam.
As with many scams, it does have some resemblance to how multi-level marketing companies such as Mary Kay Cosmetics and Amway operate; however, a key difference is that these companies actually sell products.  Pyramid schemes do not. In a pyramid scheme the source of profits is based primarily on the recruiting of new members or salespeople. 
A little common sense can go a long way in avoiding pyramid schemes.  The simple question to ask yourself is whether or not the company actually sells products and makes substantial profits through product sales or through the recruiting of new members.  If it is through recruitment, it is most likely a pyramid scheme. Anyone who is considering investing in what is represented to be a multilevel marketing business should always investigate the company and the terms of investment carefully before investing any money.  In addition, you should also check out the company with the FTC and your state’s attorney general to make sure that the company is legitimate before investing any money.  Here is a link to information from the FTC that you should consider before investing in a multilevel marketing business.
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