Deepak Gupta

Jobs and income · Also called work at home scam, starter kit scam, pyramid scheme, business opportunity scam, MLM recruitment scam

Work-from-home and pyramid scheme scam

A work-from-home or pyramid scheme scam sells you an easy way to earn money from home, such as a starter kit, paid training, or a place in a recruiting network. You pay up front, but the promised income never comes, or it depends mainly on recruiting other people who must pay too.

How it works

An ad or social media post promises high earnings from home with little effort.
You are asked to pay for a starter kit, training, certification, or inventory before you can start earning.
In a pyramid scheme, the main way to make money is recruiting new members who also pay to join.
You are pushed to buy more product or recruit more people, and most participants end up earning little or losing money.

Red flags

You are promised a high income from home with little effort.
You must pay for a starter kit, training, or certification before you can earn anything.
Promoters say recruiting new members is the real way to make money.
You face high-pressure tactics, or are pushed to buy more product than you can use or sell.

If you are targeted

Stop paying: do not buy more products, training, or upgrades, and do not recruit friends or family.
Contact your bank or card issuer and ask whether any payments can be disputed or reversed.
Report it. Our Report a scam page lists where to report in your country, such as ic3.gov and ReportFraud.ftc.gov in the US.
In the US you can also report it to your state attorney general.

Where to report, by country

Prevention

For individuals

Know that the FTC says most people who join even legitimate multi-level marketing businesses make little or no money.
Before joining, ask current and former members how much they earned after expenses, and how much of it came from recruiting.
Do not pay up front for the promise of a job or income.

For organisations

Social media platforms can remove ads and posts that promise guaranteed income from home.

Real cases

No documented case in the atlas yet. New cases are added as they are sourced.

Delivered through: Social media ads and posts

How official datasets classify it

FTC: Business & Work-at-Home Opportunities
Scamwatch: Jobs and employment scams

Questions

Is multi-level marketing a scam?: Not always, but the FTC says most people who join even legitimate MLMs make little or no money. If the main way to earn is recruiting people who pay to join, it may be an illegal pyramid scheme.
Should I pay for a starter kit to work from home?: Be very careful. The FTC says honest employers do not ask you to pay to get a job, and many work-from-home offers that need up-front payment for kits or training are scams.