Pyramid Schemes or Illegitimate MLM's

As pyramid schemes are rife in the real world, so are they spreading through the Internet. And as these schemes are often illegal in the real world, they should also be avoided when scouting for a home-based business. In a pyramid scheme home business, you will be asked to recruit people. Your earnings will be based on their earnings of something that you will need to sell. Although this may seem promising, very few people have actually made money from pyramid schemes. If you spot a home-based business offer requiring you to make a certain number of sales a month, while referring a certain number of people a month, then this is the sign of a pyramid scheme, and you should avoid it.

So what home businesses should you avoid? Stay away from home business offers promising earnings in the millions for only a few minutes of work. Shun offers that require you to pay money, make referrals, or post advertisements using your own funds. If a home business offer needs you to assemble something, sew something, or put together something, then be wary before taking the home business plunge.

When in doubt, examine a home business offer while asking yourself what exactly the home business is asking you to do. Ask where your salary will come from, or if you have to rely on commissions to get paid. Inquire about who will pay you, and where the money will come from, as the credibility of the home business source will also give you a clue on its legitimacy. Lastly, factor in the costs that you may run as a member of the home business program, including electricity bills, equipment, and membership fees.

If the home business offer seems suspicious, you may want to approach the local offices of your state Attorney General, consumer protection agency, Securities and Exchange Commission, or Better Business Bureau. You may also want to consult with your United States Postal Inspection Service to check for mail fraud cases. Your complaints can help future home business inquirers in choosing a good home business to pursue.