Prior to the growth of the internet, pyramid schemes would rope people into their plans with elaborate meetings hosted by people who appeared to be wealthy and offering to share their secrets of success with the lucky few who chose to attend the meeting, typically hosted at a local hotel. Sometimes, a few of those attending were deemed winners and were invited to attend additional seminars on getting rich quick at a luxury resort, paid for by the company. Although, most times the victims were responsible for their own transportation.
It was only after joining the program and returning home did they realize they had been had. They may have paid, for example $500 to become part of the program and for every person they enticed into the program, that also paid $500, they would receive a part of that fee as their reward for signing them up, typically between $50 and $100. For the $100 finders fee for every person they brought it, after five people signed up their investment would be paid off and anything after that was pure gravy.
They also may have been enticed into the program by the promise of receiving a commission from every new member brought in by the people they signed up, often with tales of unlimited income. These pyramids began to crumble when people realized that after approaching their warm market, that is their friends and family, no one was signing up because there was nothing tangible received in return. Simply put, they were out of the money they gave.
While this harsh reality settled in, they were not daunted by their failure. In many cases they admonished themselves and then moved on to another project that was more promising. They did not even have to sell anything to make money, they just needed to recruit other people who could sell and still receive a commission. Promises of an astounding income without having to work appealed to a lot of people.
These scams quickly grew is number with the use of the internet and no longer require a motel meeting room. The victims are also from a much larger global pool and those pushing these scams remain anonymously hidden behind screen names and email address, usually discontinued when the sign ups begin to wane. The same operators however, will be back with a different name and possibly a twist to the same old scam. Those considering getting involved in network marketing are advised to investigate fully any opportunity that seems to good to be true, because it usually is.