You enter the pyramid scam by giving money to someone. This may be physical handing of cash to the person, or it is through a digital platform where you pay using electronic means. When this happens you are under someone who is benefitting from you joining, thus the person is on top of the pyramid.
To make money, you then need to recruit people to be under you and give you money. This is how it works, and it keeps going on and on, until people who join don’t find people to recruit under them to make money.
Let’s assume the following: Founder Tatenda sits alone at the top of the heap, represented by the number “one.” Assume Tatenda recruits 7 second-tier people to the level directly below him, where each new joiner must issue him a cash payment for the privilege of joining. Not only do those buy-in fees funnel directly into Tatenda’s pocket, but each of the 7 new members must then recruit 7 tier-three members of their own (totaling 49), who must pay fees to the tier-two recruiters, who must send a percentage of their takes back up to Tatenda.
According to the hard-sell pitches made at recruitment events, those bold enough to take the pyramid plunge will theoretically receive substantial cash from the recruits below them. But in practice, the prospective member pools tend to dry up over time. And by the time a pyramid scheme invariably shuts down, the top-level operatives walk away with loads of cash, while lower-level members leave empty-handed.
In simpler terms, Tatenda gets into the scheme and recruits, Mary, Sarah, Mambo, Tino, Ngoni, Kundai and Hewitt, these people then issue money to Tatenda and they also recruit seven people under them, it goes on and on until it fails just like all pyramid schemes do.
Multi-Level Marketing
This is a typical pyramid scheme that is covered up by sales of over valued goods.
In this instance scammers inform you that if you buy goods such as medical products from them, and you recruit other people to be under you, you obtain money from both selling the goods that you bought as well as recruiting people. This is a typical pyramid scheme but just covered up by the goods that are factored in.
A typical example of such goods are medical products. The medical products are over valued and even if you receive them, they are worth much less than you would have paid for them, and you cannot resell them and make a profit.
Scammers in this instance, establish fake stories and profiles such as them being millionaires from selling the products. They set up virtual meetings whereby they explain how you can become a millionaire too. They send fake pictures either of them living lavish lifestyles or of other people who they indicate to be them. They sell the idea of you also able to become a millionaire in a short space of time.
When you give your recruiter the money, it is your job to no recruit other people just like they did so that you receive your money back. Other than that, there is no other way of recovering the money since the goods that you will have received are worthless or they won’t even send you the goods.
Many people have fallen victim to this kind of scam since it does not portray the normal pyramid scheme.
Daisy Chain Emails
Scammers send multiple emails to multiple people sourcing donations to organizations that they indicate as part of the email. They do this by social engineering as well as searching on social sites on names of people and guessing what they emails can be. For example, let us say that your name on Facebook is John Doe, there is a higher likelihood that your email is johndoe@gmail.com, thus guessing emails is not that hard.