Some Thoughts on Making Money Scams Online

There are making money scams everywhere, not just the Internet.  However people are just too eager to call anything that doesn’t work instantly without doing any work, a scam.  This is unfair and does affect the reputation of many actually legitimate businesses.

An example of real making money scams would be Ponzi or Pyramid schemes.  Some people think all MLM (multi-level marketing) programs automatically fall under these illegal categories. It’s not true, and again, this is not fair. Let’s look at the differences.

A Ponzi scheme is where there is no product or service and merely a scheme to sign people up to some program and it just goes on and on. There is no substance at all to the ‘business’.  Just endless signing people up with no purpose other than that. 

There are now laws for businesses that do include referrals in their compensation plan and they are required to have some product or service that is the main focus, with referrals being just an additional way to earn.

Another example of illegal making money scams under the Ponzi scheme umbrella, is where you ‘send $5 to the next person on the list’ and they will send $5 to the next person, and the next will continue on down the list; and before you know it you will have bags of letters with $5 bills in there. 

Many people who would scream scam at any number of other programs don’t realize this ‘Send $5′ scheme is illegal and aggravated by the fact that the postal service is being used in the crime.

To make it worse this one is often attributed to some famous TV personality who has ‘featured’ this on their program (and therefore it is assumed to be legal).  It’s not only illegal but also untrue. It’s an urban legend.

A pyramid scheme is one in which only the people at the very top of the pile ever make any money.  The people below are just worker drones bringing in money for the fat cats at the top.  The way these making money scams sound on their face, is that everyone can make money. If anyone who comes in after the first week ever does make any money it is a very small percentage of what the top is making. Not fair.

Conversely with MLM programs, anyone can attain the level of success that the original members have, assuming they do the same amount of work and give it the same amount of time.  As required by law, they include the ability to make commissions from the sale of tangible products and services in addition to referrals.