If you do so, you earn money. The directors of the organization (those at the top of the pyramid) also receive a share of these payments. Pyramid schemes are based on tiers where new members are at the bottom and the members at the top make the majority of the money. There are only so many people who can join. According to the Federal Trade Commission, pyramid schemes “promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.” If you join one you could end up losing hundreds of pounds, not making money. After all, legitimate investments rely on valuable goods and services to make money and generate returns - not membership fees. Since it has no products or services, you need to promote the membership of the Pyramid Scheme. They usually start with a person offering an attractive investment opportunity with little or no risk. Pyramid schemes often involve products that have no real resale value. They are: If there’s a program that’s placing a lot emphasis on getting others to join – as opposed to selling a product or service – chances are that it’s illegal. People are being warned to watch out for so-called 'pyramid' schemes as unemployment continues to surge in the wake of a second coronavirus outbreak. The individual recruits one person, who is required to invest a certain amount of money. It means that the variant would involve selling products or services with little to no value. At such time, those at the top of the pyramid have earned huge profits while those at the base end up losing their investment. 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