Pyramid selling

Warning signs of a pyramid scheme

You may have been asked to join a pyramid scheme if any of the following applies: 

  • you are approached for a ‘business opportunity' rather than the product
  • you are asked to pay to join
  • you have to pay for expensive sales aids and training seminars
  • you earn commission for selling training later on
  • you have to buy levels of stock that are difficult to sell and you can’t return
  • legal issues are glossed over or left out
  • the products are overpriced
  • there is a high energy presentation that is low on substance - questions may not be encouraged
  • there are claims the business is registered with authorities so it is legitimate - just because a business name is registered doesn’t mean it's legitimate
  • being given the hard sell using words like ‘pre-launch’ and ‘get in on the ground floor’.

If you are involved in an unlawful pyramid selling contract and the business is based overseas, you won’t be able to seek legal action through Australian courts and will have to walk away from your losses.

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Last updated: 27 June 2017