Mid-Valley Scam Alert: Pyramid schemes

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A new year is upon us, but I thought it would be fun to discuss a scam as old as time for the first 2023 edition of the Mid-Valley Scam Alert.

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?

What is a pyramid scheme?

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.

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