They all sound the same to me!
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There is no real “pyramid” in a Ponzi scheme. It typically has a central organizer who keeps on scamming more and more customers, paying back some and eventually absconding with the money. Ponzi schemes are, on the face of it, illegal. There is no “reasonable” Ponzi scheme – it is fraud from the get go.
Pyramid schemes are those that rely on an ever widening base of contacts. An MLM is a kind of pyramid scheme. MLMs are not necessarily illegal – they simply rely on a rather unsupportable distribution model that make it very hard for lower levels to ever make money. As long as goods are bought and sold more or less as promised (even though overpriced or of questionable quality) then an MLM is likely not illegal although rather questionable.
Where MLM is ethically challenged is that it promises a relatively easy way to make money by leveraging a person’s circle of friends and family. To do so, members are enticed into buying lots of goods and tasked with selling them (basically acting as an unpaid salesforce) living entirely off commissions.
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