Skeptic Project

Classic Amway-style pyramid scheme.

Omni:

This type of scheme goes by a number of names. Most common is "multi-level-marketing," which is (barely) legal in the United States. All MLM schemes are pyramid schemes, but some are legal and some aren't depending on their exact features.

Basically the idea is, supposedly you make money by recruiting others into the scheme, and then distributing products to them that they sell, and you collect a percentage of everything they sell. The problem is that you quickly saturate the potential market, and because increased profits depend on recruiting new members, you hit a wall very quickly. Most of the buying and selling of products is done by distributors to each other.

These types of scams are associated with Amway because that was the first company (and still the biggest, I think) to make big money at this. A number of other companies have adopted the MLM model (Mary Kay, Pre-Paid Legal, Pampered Chef etc.). I guarantee you that sometime in the next 5 years you'll be hustled by an Amway distributor or someone like that.

Read about these schemes here:
http://www.skepdic.com/amway.html<br /> http://www.skepdic.com/mlm.html

http://media.libsyn.com/media/skepticsguide/skepticast2008-02-20.mp3 @ 36 minutes is an interview with Robert Fitzpatrick, the Author of False Profits on The Skeptics' Guide to the Universe. This is more through then the Bullshit Episode, but less funny.

I got hired by an insurance firm to sell insurance for CitiGroup. The first hour of the first day of training I stood up and walked out when they brought out the pyramid. Shortest job I ever had.

Quixtar is Amway too, so watch out for them