Talk:Pyramid scheme/Archive 2

This is an archive of past discussions about Pyramid scheme. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page.

Archive 1

Archive 2

Recent information on Pyramid schemes

Have there been any recent information on Pyramid schemes?--67.41.1.161 (talk) 15:23, 4 June 2010 (UTC)

I know that most pyramid schemes don't offer any tangible 'goods' or 'services' and pay only for recruiting other people into the scheme, but I have heard of some schemes that do offer a product that is something extremely cheap sold way in excess of its true value, in order to make the scheme look legit. I know that Burnlounge was one such scheme; offering the chance for members to make money selling music downloads, but it was eventually found to be an illegal pyramid as a lot more money was made from recruiting new members instead of selling music. Is it worth adding this to the article? I was a bit unsure but thought I'd mention it here first to get some opinions. —Preceding unsigned comment added by Diamondblade2008 (talk • contribs) 21:30, 20 June 2010 (UTC)

Not really. Many pyramid schemes try to hid their nature buy offering a good, service, or even "job" to make them seem legit. For the most part what constitutes a pyramid scheme is where the focus is--it is selling the product or service or it is recruiting more people? If the answer is recruiting more people then you have a pyramid scheme. This is why some people say that multi-level marketing is nothing but a legalized pyramid scheme as the entire structure is dependent on if people want to make money at doing recruiting endlessly.--BruceGrubb (talk) 12:27, 4 July 2010 (UTC)

Thanks for that BruceGrubb. Much appreciated. I am aware that Amway is one example of MLM, though sometimes viewed as a 'legal' pyramid scheme like you mention. Diamondblade2008 (talk) 20:56, 10 July 2010 (UTC)

If you go through the Archive you will see Stephen Butterfield's 1985 Amway, the cult of free enterprise‎ South End Press page 13 ("The marketing system of Amway, disclaimers notwithstanding, is a legal form of pyramid sales."), Ronald D. Michman in his 1988 Retailing triumphs and blunders Praeger (part of Greenwood Publishing Group) page 242 ("Amway would seem to operate a legal pyramid scheme. Amway sells their distributors a dream."), and Chryssides 2006 in The A to Z of new religious movements The Scarecrow Press, Inc page 30 ("Amway uses a form of pyramid selling, albeit one that has been ruled legal in US courts."). Of these only Michman would be considered reliable as a source for an article.--BruceGrubb (talk) 14:40, 11 July 2010 (UTC)

What about lockerz

I think this site should be included as an example —Preceding unsigned comment added by Sumirp (talk • contribs) 20:18, 26 June 2010 (UTC)

We can't throw in every example we find and besides we need reliable sources to even state it is one.--BruceGrubb (talk) 14:43, 11 July 2010 (UTC)

Relevance of Social Security claim?

I deleted the following sentence "There have even been charges by people like economist Thomas Sowell that the United States Social Security program itself is nothing more than a legalized pyramid scheme.[21]" about a month ago, but it has been replaced. I fail to see the relevance of such an accusation to the content of this article for two reasons. 1) The purpose of this article is to give a general explanation of pyramid schemes, and as such should stick to well-documented, well agreed upon examples. 2) It is a partisan and highly controversial statement. Simply citing a person's opinion from an OP/ED piece does not establish any factual basis for a claim, and this is not the place for an argument about the merits and demerits of the American Social Security System. "There have been charges by people like..." are weasel words. Either cite these people or say specifically that Thomas Sowell is making the accusations (or better yet, just save it for a politics forum). Additionally, the statement is located in the introductory section concerning definitions. Even if this comment were appropriate to include in the article, it would belong in the Notable Recent Cases subheading, not the intro. Whoever has reverted this, please give your reasoning for doing so. Akigawa (talk) 12:07, 9 August 2010 (UTC)

Expert in the field (Thomas Sowell) makes comment that many others do but unlike them he is reliable.--BruceGrubb (talk) 06:48, 23 August 2010 (UTC)

I agree with Akigawa, and have removed the information from the lede. It's a primary source, and a poor one for use in this article. If someone can find some secondary sources that demonstrate Sowell's opinions are worth noting, then maybe it could be re-introduced into the body of the article. --Ronz (talk) 15:37, 23 August 2010 (UTC)

Akigawa's user page shows clear POV issues and Ronz doesn't really give good reasons for keeping Thomas Sowell's comment out.--BruceGrubb (talk) 23:07, 3 January 2011 (UTC)

Please focus on content. --Ronz (talk) 23:22, 3 January 2011 (UTC)

That is what I am doing. Thomas Sowell is not the only one saying this. Michael Mandel in his online December 28, 2008 Buisnessweek article "Is Social Security a Ponzi Scheme?" points out other people who claim the same thing. A Yale University Press book "The real deal: the history and future of social security" cites economist Paul Samuelson's February 1967 Newsweek column (pg 110). We even has a well sourced section Social_Security_debate_(United_States)#Claims_of_Social_Security_as_a_pyramid_or_Ponzi_scheme citing Michael Kinsley, William G. Shipman, and Cato Institute all claiming Social Security is a Ponzi scheme.--BruceGrubb (talk) 07:00, 6 January 2011 (UTC)

I've linked to the Social_Security_debate_(United_States)#Claims_of_Social_Security_as_a_pyramid_or_Ponzi_scheme in See also instead, and I find it still problematic. This is an encyclopedia we're writing here, and this is of dubious value to an article on pyramid schemes. Maybe if we had a section on the misuse of the term, then the Social Security info might deserve a footnote. --Ronz (talk) 20:04, 6 January 2011 (UTC)

Is this original research? Should it be part of the article?

I have reservations over this paragraph in the article:

"Other cons may also be effective. For example, it is fathomable, but not cited or reported anywhere, that rather than using false names, a group of seven people may agree to form the top three layers of a pyramid without investing any money. They then work to recruit eight paying passengers, and pretend to follow the pyramid payout rules, but in reality split any money received. Ironically, though they are being conned, the eight paying passengers are not really getting anything less for their money than if they were buying into a "legitimate" eight-ball scheme which had split off from a parent. They truly are now in a valid eight-ball, and have the same opportunity to earn a windfall if they can successfully recruit enough new members and reach captain"

This sounds to me like original research. The paragraph even blatantly says "not cited or reported anywhere" which clearly implies that its original research and therefore should not be in the article. Any comments on this please? Diamondblade2008 (talk) 16:49, 1 October 2010 (UTC)

Further addition to recent cases

On the news on Radio Four on 7 March 2012, it was announced that two men involved with the biggest pyramid scam in Britain had got into trouble with the law. If any one heard the article on the news and can remember the details, it could go in the article under the "Recent Cases" section. ACEOREVIVED (talk) 11:34, 8 March 2012 (UTC)

Ponzi scheme? Bubble?

Neither of these meet the description of a pyramid scheme given in the lede. Seems like a contradiction. Grover cleveland (talk) 15:49, 14 September 2012 (UTC)

Agreed. We have a circular definition, or fundamental misunderstanding. Pyramid scheme is about pay to join, recruit people (usually 2 or more) into the scheme, and get paid when you reach a certain quota (cycle out, fill the matrix, etc.). Each participant is expected to recruit 2 more more. Ponzi scheme is almost always centralized on one person, who does all the recruiting. Individual participants do not recruit, in general. There are hybrid schemes, of course, but these should be the fundamental differences. Kschang77 (talk) 09:08, 23 October 2012 (UTC)

the illustration

The main picture (of the pyramid), is very misleading, as the volume of the pyramid increases polynomially, and not exponentially with its height. Exponential growth is a completely different thing, and it is the reason why pyramid schemes don't work. I would suggest finding a better image. --345Kai (talk) 15:49, 26 April 2013 (UTC)

"Pyramid schemes are a form of fraud"

I don't see how pyramid schemes can be considered intrinsically fraudulent. Wikipedia defines fraud as; "an intentional deception made for personal gain or to damage another individual". In most cases people who participate in pyramid schemes are told of and/or understand the risks involved. In fact, I don't see how anyone can fail to understand the risks! I'm sure everyone who enters is told that they have to recruit members to gain money otherwise there'd be no incentive to recruit new people and every person equipped with what passes for a brain these days can foresee the possibility of not being able to recruit the necessary amount of people. And before you say anything, I've never been in a pyramid scheme although I have been offered by a friend... Gabzlab00 (talk) 10:48, 26 May 2011 (UTC)

A non fraudulent pyramid scheme would disclose your true position in the pyramid. People know that if they are low down in the pyramid, they are unlikely to get money. So they must be enticed into believing that they are high up. That is the fraud. Your typical chain letter is more honest, because the recipient knows that they are at least at the Xt level of the pyramid, where X is the length of the list. But a truly honest chain letter would label each line as it's added with an incrementing number, so you know, at a glance, how low you would be, and can make an informed decision on whether to buy in after doing a little bit of math. 74.211.58.183 (talk) 17:33, 3 December 2012 (UTC)

In my opinion the "informed"rational person would not invest because they know that whoever joins last will loose everything and this is not considered a "risk". This is for sure the last people to join lose everything. People who live on principals of fairness and are attempting to be moral(not to be confused with ethical) in there actions and intentions to other humans will not engage or promote this because they know that injury will occur eventually to someone, risk is not part of the pyramid scheme. Investing in a legal stock market is a "risk". The money could actually grow if conditions are in favour of the reasons for the investment or there's some good luck.~no doubt pyramid schemes are fraud. — Preceding unsigned comment added by Kingofallclergy (talk • contribs) 05:15, 12 May 2013 (UTC)

A very conceit shallow intelluctualism

Though I have personally never joined any such schemes, I feel compelled to post a rejoinder. The writer of the main article is highly conceited persons who feels that all people are idiots and he himself also has 'scientific' information on what would happen.

The business will collapse! How? Because it is conning! What about the other immensity of business that fail over the decades?

It is a legitimate business in which the participants are very well told the rules. If they want they can participate. If they want to join again at the bottom, they very well can.

The problem with this article is that a lot of self righteous adjectives have been added. Whether a business is fake or not is not for an Encyclopedia to decide. All it can mention is how it function. Wikipedia in many article, has gone down to sub-standards. But then it is inexpensive, and there is a lot of information in it. Along with a lot of nonsensical claims. — Preceding unsigned comment added by 117.214.27.92 (talk) 07:57, 18 January 2014 (UTC)

If there are reliable sources coming to the defense of pyramid schemes, please let us know. Wikipedia isn't based on the opinions of editors, it's based on WP:VERIFIABILITY. The vast majority of reliable sources agree that pyramid schemes are unsustainable. Pyramid schemes in Albania is an example of real, documented economic damage caused by pyramid schemes (although the article itself needs a lot of work). Grayfell (talk) 22:18, 18 January 2014 (UTC)

countrys

do we really need to list all the countries that it's illegal in I feel like it could be said a lot more simpler. — Preceding unsigned comment added by 99.236.241.6 (talk) 23:18, 21 February 2014 (UTC)

There's plenty of case law. How about we look at it?

If we cover every company that's ever been accused of being a pyramid scheme, that's kind of ridiculous. The less-than-careful reader thinks a company is now associated with being a pyramid scheme, when in fact, the opposite is true. Example: Amway. Yes, there was a court case, but the FTC found that Amway was NOT a pyramid scheme. There were found to be other issues, and a settlement was reached, with Amway paying a fine and agreeing to make some changes, but they were cleared of pyramid scheme charges.

The landmark case is FTC vs. Koscot Interplanetary (1975). From that came the 4-way Koscot Test. It's probably also worth talking about the Amway Safeguard Rules that came out of that case. — Preceding unsigned comment added by 72.182.2.180 (talk) 23:16, 31 March 2014 (UTC)

Do you have reliable, WP:SECONDARY sources? Additionally, remember that Wikipedia isn't just based on a United States perspective. Qnet, for example, has been declared a pyramid scheme in other countries. I don't see a problem with including examples that have been widely discussed in reliable sources as being possible pyramid schemes. Amway is not named in this article, so I'm not sure why you're using that as an example. Bending over backwards in the name of 'less-then'careful' readers is a dangerous precedent and strikes me as overly accommodating to a fringe perspective. Grayfell (talk) 23:29, 31 March 2014 (UTC)

Multi-level Marketing

The article says "multilevel marketing plans" have been also been classified as pyramid schemes (with a link to multilevel marketing entry). They give a long list of citations... but none of them seem to provide support for that statement. Many multilevel marketing companies like LifeVantage and World Financial Group have been around for substantial periods of time and have not been deemed illegal. So is this accurate?

For the record I'm not trying to defend multilevel marketing. I dislike it greatly. I'm just trying to see if that statement is accurate because they seem to be distinctly different. — Preceding unsigned comment added by 198.105.217.4 (talk) 16:20, 29 March 2015 (UTC)

"Companies that use MLM models for compensation have been a frequent subject of criticism and lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price fixing of products, high initial entry costs (for marketing kit and first products), emphasis on recruitment of others over actual sales, encouraging if not requiring members to purchase and use the company's products, exploitation of personal relationships as both sales and recruiting targets, complex and exaggerated compensation schemes, the company and/or leading distributors making major money off training events and materials, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion." zlouiemark ^{[ T ] [ C ]} 03:18, 16 June 2015 (UTC)

Picture glitch

Hello,

At least on my computer (Mac running current versions of Chrome, Firefox & Safari) the headline picture (up to today) had a glitch: the text is truncated on the right and hidden behind the pyramid in part on the left. I've replaced the picture with the older jpg, which while a bit grainy does display all the text. Any comments/suggestions for a fix to the svg image? Blythwood (talk) 13:55, 20 June 2015 (UTC)

Proposed merger of Pyramid scheme and Ponzi scheme

Absolutely not! Although both schemes serve to gather money from many to enrich the few, and rely on the greed of everyone involved to obscure common sense ... there are important distinctions which cannot be ignored: Ponzi is presented as a financial product - investors are told their money will be managed in some profitable way by the investment company. They are not involved in any transactions, and their role in recruiting new investors is limited to word-of-mouth testimonials. They can usually get their money back just by asking before the whole scheme collapses. (The legitimate analog is a mutual fund.) Pyramid is presented as a business opportunity - investors are told that they are buying the tools to run their own business. They are intrinsically involved in the transactions that are supposed to generate their returns – both selling of whatever product and recruiting of new members. They cannot choose to pull their money out (baring 'selling' their business, if allowed) but can influence their chance of recouping money by building their part of the pyramid before the scheme collapses. (The 'legitimate' analog is a multi-level-marketing business where the profits come from selling real products.) Marcinjeske (talk) 16:54, 25 October 2015 (UTC)

Also oppose. As Marcinjeske says. There are many important differences between the two types of schemes. Explaining both schemes in a single article would be messy and confusing. --Enric Naval (talk) 20:53, 25 October 2015 (UTC)

Also oppose. It has been proposed to merge Ponzi scheme into Pyramid scheme, but in my experience, Ponzi schemes are much more well known and it wouldn't make sense to put the more well known topic in the article for a lesser known subject, unless it was a smaller article. This may be just be but it may be worth consideration. JoshBM16 (talk) 04:02, 5 December 2015 (UTC)
Oppose. Many structural differences. Per Marcinjeske above. Ceoil (talk) 09:09, 5 December 2015 (UTC)
I oppose as well. Ponzi scheme does not fit properly into the other article. Ponzi got quite famous with his business in the 1920s. -Liechtenstein96 (talk) 08:45, 10 December 2015 (UTC)
Oppose. I suspect "Ponzi scheme" was not a well-known term outside the US, at least until Bernie Madoff. Certainly the Albania 1997 and the MMM were described as "pyramid schemes" in the UK media at the time. That is either a downright misnomer, or at the very least a confusing conflation of two different things by giving them the same name. The two articles (pyramid scheme and Ponzi scheme) should definitely not be merged, although more effort might be made to warn readers that "pyramid scheme" is often used to mean "Ponzi scheme" -- the nuclear option would be to make pyramid scheme a disambiguation pointing to two articles, pyramid scheme (business model) and Ponzi scheme. jnestorius^(talk) 14:11, 2 February 2016 (UTC)
- Aside: I think Category:Pyramid and Ponzi schemes ought to be split into Category:Pyramid schemes and Category:Ponzi schemes. A few articles like Matrix scheme might belong in both. Category:Pyramid schemes is likely to stay quite small, which will make it easy to review and see if someone has erroneously transcluded a Ponzi scheme. jnestorius^(talk) 15:18, 2 February 2016 (UTC)
Oppose. Despite superficial similarities there are fundamental differences that warrant two articles. Blackguard 19:40, 2 February 2016 (UTC)
Oppose. The issue of sustainability is common to the two but they are fundamentally different.Zoso Jade (talk) 04:49, 17 February 2016 (UTC)
Oppose. In both schemes the existing participants receive payouts from the new investors. To me a "pyramid scheme" is "open", the participants can to some extent see what's going on and how the money is flowing (and everyone ought to understand it's not sustainable and going to collapse). The participants are supposed to recruit new participants, and if they fail to do so, they lose. In a "Ponzi", the participants are told their stake is being invested into legitimate businesses, and the participants believe that the paybacks come from "external" profits. When the payouts exceeds the new investments, the Ponzi-organizer grabs whatever is in the pot and runs. 2001:840:F000:4250:C0FF:E000:0:8 (talk) 19:58, 17 February 2016 (UTC) (User:Tobixen that has forgotten his password)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

Extended usage

The section entitled "Extended usage" has three references, and is not detracting from the remainder of the article. Some WP editors/contributors may have some questions to raise about this section, and by all means let it be discussed. However, it is not justified to keep simply deleting the section, unless you want to rename the article to "Pyramid scheme (financial sense)". —DIV (115.64.145.215 (talk) 12:49, 2 July 2015 (UTC))

Welcome to Wikipedia. Thank you for starting a discussion on the topic. Can I safely assume you are 120.23.71.194 (talk · contribs) and 101.117.21.212 (talk · contribs)?

It appears to me that the content has little or no encyclopedic value, while violating multiple WP:NOT categories.

Of the now three sources, perhaps only the Guardian source is reliable. Isn't it just a comparison rather than an "extended usage"?. What is the "Consultation Paper", who authored it, in what context was it created and for what use? --Ronz (talk) 15:44, 2 July 2015 (UTC)

Hello, Ronz. Welcome to Wikipedia.

With time you will find it is most productive to be specific in your critiques. Including a link to "WP:NOT" without specifying any specific clause makes it hard to know which you had in mind.

In answer to your question, the consultation paper is an official document of an Australian Government agency, the NHMRC. Seems 'reliable' to me. This should have been obvious from the link.

I don't think it is merely making a 'comparison': it is use of the phrase "pyramid scheme" to describe something other than financial investment. It happens quite a lot, and you could find other examples if you tried.

—DIV (120.17.81.37 (talk) 11:53, 3 November 2015 (UTC))

Thanks for clarifying. Could you answer my remaining questions? Are you a single person using all these ip's? (115.64.145.215 (talk · contribs), 120.23.71.194 (talk · contribs), 101.117.21.212 (talk · contribs), and 120.17.81.37 (talk · contribs)). Who authored the consultation paper? In what context was the consultation paper created and for what use? Additionally, can we safely assume the consultation paper is in draft form still? --Ronz (talk) 16:52, 3 November 2015 (UTC)

There is an overwhelming consensus that they are distinct from each other. Esquivalience ^t 03:17, 22 February 2016 (UTC)

The following discussion is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

Removed reference to a self-published book (Timi Ogunjobi)

I have found that Timi Ogunjobi, the author of the book SCAMS – and how to protect yourself from them, actually owns Tee Publishing which published this book. This makes it a self-published book and thus can be considered unreliable. See for example here: https://www.gmdu.net/corp-714458.html Moreover, he is not an expert in MLM (he is a technical writer and web designer - see here: https://www.packtpub.com/books/info/authors/timi-ogunjobi). Therefore, I removed it from the sources.--Historik75 (talk) 21:30, 25 March 2016 (UTC)

Connection to MLM

I've reworded using what the sources actually said, as the previous text was not supported by the sources.--Icerat (talk) 17:54, 25 March 2016 (UTC)

Also, while the following is factually correct -

While some people call MLMs in general "pyramid selling,"[8][9][10][11] others use the term to denote an illegal pyramid scheme masquerading as an MLM.[12]

I'm concerned it's original research/synth and a little "weasel word"? Can we find a source that talks about the confusion? --Icerat (talk) 17:57, 25 March 2016 (UTC)

I've rewritten the paragraph to reflect the gist of the entire article, rather than a handful of selectively chosen quotes. Bestowing or revoking the overall legitimacy for MLMs is not neutral, and not within Wikipedia's power. Since we have sources later in the paragraph explaining that multiple experts describe MLMs as legalized pyramid schemes, "associated with" seems far more neutral and accurate than "confused with". If we need to bring those source up and expand their prominence, or add more, we can, but this seems perfectly clear and much simpler. Grayfell (talk) 22:14, 25 March 2016 (UTC)

Problem is there's no cite for the opening statement for the section, right now it's OR or at best SYNTH. The statement I used was a clear reflection of a source already used. You also re-broke the fixed link and readded a source (the one I used for the opening statement) in support of a statement it doesn't support (doesn't even mention term "pyramid selling"). So still needs some work. --Icerat (talk) 22:29, 25 March 2016 (UTC)

The source is the FTC, which goes into great detail about the connection between MLM and pyramid schemes. We don't need to use a ref tag for every single sentence. Grayfell (talk) 22:35, 25 March 2016 (UTC)

I suggest you actually read the source. No offence, but I'm skeptical you have done so recently, given you provided an old broken url [1], deleting the accurate one I provided.[2] If you did so, you would also find this initial reference to MLM, where Valentine says -

"Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel marketing programs are known as MLM's,(4) and unlike pyramid or Ponzi schemes, MLM's have a real product to sell. More importantly, MLM's actually sell their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system. MLM's may pay commissions to a long string of distributors, but these commission are paid for real retail sales, not for new recruits."

This is entirely consistent with the text you deleted −

"Consumers often confuse legitimate multi-level marketing with pyramid schemes"

At no time does the source state or even imply that "Network marketing and multi-level marketing (MLM) business have become associated with pyramid schemes"--Icerat (talk) 22:45, 25 March 2016 (UTC)

Maybe since we are discussing this, you should stop edit warring until we've reached consensus. I've read the article multiple times, including just now. It's already cited in the article elsewhere with the correct link. I don't know what you think the word "associated" means, but I think are again deliberately wasting time with this kind of nonsense. The quote is cherry-picked, as the entire article makes it clear that there is a conection which is far more complicated, and far less flattering, than your edit made it out to be. The paragraph you cite clearly indicates that MLM and pyramid schemes are associated. Grayfell (talk) 23:10, 25 March 2016 (UTC)

Blame the sources - including the FTC - not me, Grayfell. They both clearly state "confusion". Definition of "associated" is "(of a person or thing) connected with something else". Legitimate MLM and pyramid schemes are not "associated", the authoritative RS (including FTC) are clear they are different. Wikipedia should not be adding to the confusion with OR. --Icerat (talk) 23:16, 25 March 2016 (UTC)

still worried about the "pyramid selling" sentence. It's clear there is confusion between sources, but right now that's supported through OR. Smith's book refers to it but not in a clear way, pointing out a dictionary definition of "pyramid selling" that calls it illegal, while an old UK law used it to refer to legal MLM. Need a better way to word/handle it I think. --Icerat (talk) 23:21, 25 March 2016 (UTC)

and "connected" in the title doesn't fill NPOV to me either. How about simply "pyramid schemes and multilevel marketing"? --Icerat (talk) 23:26, 25 March 2016 (UTC)

I don't see why that's an NPOV problem. The section is discussing the connection. Grayfell (talk) 23:55, 25 March 2016 (UTC)

Sorry, should've been Wikt:associate, since it's a verb. The gist of source as a whole is that MLM schemes and pyramids schemes are closely... intertwined? Connected? Kissing cousins? Yes, there is confusion, but emphasizing that consumers are the ones who are confused is is misleading, because, as the FTC source makes clear, this is often deliberate on the part of pyramid schemese. Even the more respectable MLMs do a piss-poor job of properly distancing themselves from the scams, by focusing on things like where the products are stored, rather than the compensation model, for example. Like it or not, it's a blurry line. The lead of the section should summarize all sources, not just the more favorable ones. Citing an obscure Rodney K. Smith book from 1984 seems to underscore that this is a cherry-picking problem. The Salinger source is blunt, for example, and just says that MLMs are pyramid schemes that aren't always fraudulent. I don't know how much clearer that could be. Relegating the critical content to a sentence at the end of the section while selectively highlighting content that's more flattering is non-neutral. Grayfell (talk) 23:52, 25 March 2016 (UTC)

Well, just because something is a Wikipedia RS does not make it correct. Salinger (and others) are simply wrong. "legal pyramid schemes" is oxymoronic, as the FTC clearly state "pyramid schemes are illegal"[3]. As do US states - a small sample [4][5][6][7] So does the Australian government - "Pyramid schemes are illegal"[8] and NZ[9] and Canada [10]. In the EU it's been clearly stated a "legal pyramid scheme" is impossible - It is not possible to establish, operate or promote a pyramid scheme in accordance with requirements set out by law[11].

I can easily provide you with dozens and dozens of non-governmental RS that support the idea that "pyramid schemes are illegal" if you wish. "legal pyramid schemes" is oxymoronic, it makes no sense. Salinger, Coenen, Carroll et.al are contradicting not only the mass of RS literature on MLM, they're also contradicting the unquestioned authorities on "legality". If anything it can be argued their viewpoints can be completely removed from the article is they're clearly wrong and overwhelmed by other authoritative RS. Personally I don't think that would be helpful to the reader however.

As for Smith, I cited him (a lawyer!) because I have the book sitting on my desk and he clearly addresses the fact that some MLMs are pyramids, which I think should be made clear. Just because (in my experience) most other wikipedia editors in this domain don't seem to bother actually getting hold of RS unless they're on the web doesn't make him obscure. He's cited in various other RS also. There are other well-cited sources that say the same (just found one, I'll add it). --Icerat (talk) 00:46, 26 March 2016 (UTC)

I'm sure you could provide me with an avalanche of such sources. Would they be as obscure as the thirty-year old law book you added? How many are by MLM distributors themselves? Wikipedia doesn't dismiss some sources just because you call them "wrong", not even if you can paper-mine to contradict them. I think your use of obscure, offline sources is because, like the FTC source, it's not nearly as cut-and-dry as you make it out to be, and your glib dismissal of 'other wikipedia editors' demonstrates contempt for Wikipedia as a collaborative project. Keep and Vander Nat have both made it clear in many places that this confusion is deliberately fostered by MLMs. As their work and the FTC source shows, it's a constant battle to distinguish between the two. The idea that the differences are caused by consumer confusion, or that such distinctions are ever clear-cut is preposterous. Keep and Vander Nat both discussed exactly that here. The gist, as in the cited sources, is that many MLMs are pyramid schemes. Not pyramid schemes that just present themselves as MLM (which reeks of no true Scotsman), but both simultaneously. Even the supposedly legitimate ones do a bafflingly poor job of explaining why they are not pyramid schemes, or maybe that's just the DSA being incompetent. Regardless, this isn't just a confusion over an otherwise clear-cut distinction, this is a fundamental problem plaguing MLM in a way that it plagues no other industry. How many entries in Category:Defunct multi-level marketing companies were pyramid schemes? If not that, than a Ponzi scheme, or in a couple of cases, a cult. This isn't a minor quirk, this is a major, defining problem facing MLM. Grayfell (talk) 03:57, 26 March 2016 (UTC)

Who ever said that "the differences are caused by consumer confusion"? The FTC said it. A lawyer said it. What's ludicrous is your claim that (legitimate) *MLMs* are deliberately trying to get themselves confused with illegal pyramids! That's absurd. IMO the majority of the confusion actually originates from the anti-mlm campaigners who are of the view that MLMs are inherently pyramid schemes. In fact, the basic distinction is very clear - "payment for recruiting". The issue is whether that payment is being disguised through product purchases or not.

As for sourcing, you are correct that Wikipedia doesn't dismiss sources just because I call them wrong. It does however say when evaluating a source "Whether a source is reliable depends on both the source and the claim, with the ultimate criterion being the likelihood that the claim is true.".[12] You are clearly an intelligent person, so you are well aware that "pyramid schemes are illegal" and "legal pyramid schemes" cannot both be true. Which one do you think has the higher likelihood of being true? --Icerat (talk) 12:47, 26 March 2016 (UTC)

Merge pages for Pyramid scheme and Ponzi scheme?

I noticed that there were pages for both pyramid scheme and Ponzi scheme in existence. Since they are pretty much the same, should the two pages be merged? They have very similar content and overlap a large amount and have the same failure conditions.IMJH450 (talk) 12:13, 13 April 2016 (UTC)

FTC v. Vemma

Based on several sources, [13] and [14] for example, I think the recent FTC case against Vemma should be added to the "Notable recent cases" section of this article. Do any other editors have thoughts on the matter? Thanks.Kerdooskis (talk) 19:30, 21 December 2016 (UTC)

There's wide news coverage, so I think it is due some mention. --Ronz (talk) 20:36, 21 December 2016 (UTC)

I added it. Any improvements you may have would be most welcome. Cheers. Kerdooskis (talk) 18:17, 22 December 2016 (UTC)