Pyramid Scheme

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

Various forms of pyramid schemes are illegal in many countries including Albania, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, the Dominican Republic, Estonia, France, Germany, Hungary, Iceland, Iran, Italy, Japan, Malaysia, Mexico, Nepal, the Netherlands, New Zealand, Norway, the Philippines, Poland, Portugal, Romania, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, and the United States.

These types of schemes have existed for at least a century, some with variations to hide their true nature, and because of this, many people believe that all multilevel marketing plans are also pyramid schemes.

Two overt examples of pyramid schemes are a chain letter and a ]], while a stock market bubble, particularly fueled by lines of credit (margin accounts) is a more subtle example.

Read more about Pyramid Scheme:  Concept and Basic Models, Connection To Multi-level Marketing, Connection To Franchise Fraud, In Popular Culture

Famous quotes containing the words pyramid and/or scheme:

    So universal and widely related is any transcendent moral greatness, and so nearly identical with greatness everywhere and in every age,—as a pyramid contracts the nearer you approach its apex,—that, when I look over my commonplace-book of poetry, I find that the best of it is oftenest applicable, in part or wholly, to the case of Captain Brown.
    Henry David Thoreau (1817–1862)

    We are all bound to the throne of the Supreme Being by a flexible chain which restrains without enslaving us. The most wonderful aspect of the universal scheme of things is the action of free beings under divine guidance.
    Joseph De Maistre (1753–1821)