Financial pyramid and multilevel marketing

identification, differences and related crimes

Abstract

In periods of economic crisis, when people are looking for alternatives to overcome financial difficulties, new cases of scams involving financial pyramids arise, with the false disclosure of quick and easy enrichment. This article aims to identify the main characteristics of a financial pyramid, clarify the difference between the financial pyramid scheme and multilevel marketing and identify related crimes. The method used was deductive with a literature review technique. It was possible to conclude that in order to identify a pyramid, it is necessary to check if the business is sustained through the entry fee of new members. Multilevel Marketing differs from pyramids in that it is sustained through product sales. Pyramides are unsustainable schemes, have a short life and few people actually earn money due to the harm of other participants in the scheme and, although there is a legal provision for crimes and penalties, these are not very effective.