💠 Definition:

Pyramid marketing, also called the Ponzi system, is a type of financial fraud that depends on inviting investors to invest in businesses that do not exist on the ground or that exist but do not generate profits in the usual way known in legitimate businesses. This system pays returns to investors from the funds brought in by new investors. Instead of making profits from real investments or sustainable business activity.

💠 Advantages of pyramid marketing:

The Ponzi system has several characteristics, including:

👈 First: Unrealistic profits: unrealistic returns are offered to investors, and these returns are often remarkably high and unreasonable compared to normal investment markets.

👈 Second: The Ponzi system depends on attracting new investors: the continuation of the pyramid scheme depends on attracting new investors to pay returns to existing investors, and so on. When the new influx of investors stops, the scheme can quickly collapse.

👈 Third: Lack of credibility of the team supervising pyramid investments: The person or team supervising pyramid schemes may have a previous record of fraud or unethical behavior in the past.

👈 Fourth: Generous rewards for marketers who attract more new investors: Rewards or commissions can be offered to people who attract new investors to the scheme, which encourages more promotion of the scheme instead of focusing on real investments.

👈 Fifth: Fuzziness and lack of clarity: The pyramid scheme lacks accurate information or transparency about how profits are achieved or the businesses in which investments are made.

💠 Conclusion:

In conclusion, pyramid schemes (Ponzi) are considered illegal activities in most countries of the world, as they often end in the loss of money for most investors when the scheme collapses, so investors must always be careful and conduct comprehensive research before investing in any opportunity to ensure that they do not fall victim to phishing.

>