Pyramid Scheme: What It Is, How It Works, and How to Spot One

A pyramid scheme is an unsustainable and illegal business model where participants earn money primarily by recruiting new members rather than through legitimate product sales. The scheme takes the shape of a pyramid, with a few people at the top profiting while the majority at the bottom lose their investment. Common types include MLM disguised schemes, Ponzi schemes, eight ball models, and chain emails. Pyramid schemes are illegal in most countries and inevitably collapse when new recruitment slows down.