...consumers who had purchased a [membership in] pyramid scheme were the least likely to complain – less than one-quarter indicated that they had complained. -- FTC fraud survey (2004)This is a fascinating statistic. The FTC definition of pyramid scheme specifically means "pyramid marketing schemes", as in MLMs that went over to the dark side.
Here it is important to note that FTC questions were actually 1) Did you purchase an opportunity to operate (your) own business 2) Were you lead to believe most of the money earned from this business would be from recruiting others to join the business, rather than sale of products and 3) Were you deceived by the offer of business opportunity with false income claims or false offers of assistance? (Not exact wording, but you can find the questions in the linked PDF)
It is worth noting that in MLM...
A) Almost all MLM claim you are "owning your own business", follow by a derisive attitude toward a job ("just over broke" is often uttered).
B) You almost always get some lecture that you are NOT in a pyramid scheme, yet you are told to "build your team", which is just euphemism for recruiting.
C) Many questionable "leaders" of MLMs will resort to false income claims and false offers of assistance to get you to join, then blame you for your failure. "You must be doing it wrong", they'll point fingers, "because it worked for me."
But there is a hidden statistic that is not obvious until you read the fine print...
... In conducting this test it was necessary to drop the government jobs and business opportunities categories because there are too few consumers who experienced these types of frauds to meet the necessary statistical properties to conduct a Chi-square test.The "government jobs" fraud is victim paid for false promises of government jobs. And business opportunities... needs no introduction.
But think about it. If there are so few reported incidents for them to even calculate the odds of underreporting...
Either there are so few instances of fraud in business opportunities...
Or there are so many instances of underreporting in business opportunities that it's like an iceberg...
Let's consider a real ponzi case... Zeek Rewards.
