Digital Deceit: Unmasking Pyramid Schemes on Social Media

In this insightful episode of "Hood Winked: Surviving the Scam," host Rita Owens delves into the deceptive world of pyramid schemes in the digital age, particularly those proliferating on social media. Rita breaks down how these scams operate, luring unsuspecting entrepreneurs with the allure of easy success and wealth. She highlights the subtle yet significant differences between legitimate multi-level marketing (MLM) opportunities and illegal pyramid schemes, emphasizing the importance of understanding these distinctions for anyone active in the online business sphere.

Throughout the episode, Rita offers practical advice on identifying and avoiding these digital traps. She underscores the value of thorough research, seeking external advice, and trusting one's instincts when evaluating online business opportunities. By sharing real-life examples and precautionary measures, this episode serves as a crucial guide for entrepreneurs navigating the complex and often misleading world of online business opportunities. Tune in to equip yourself with the knowledge and tools needed to protect your entrepreneurial dreams from the seductive yet dangerous world of online pyramid schemes.

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Transcript

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Hey, biz besties. You're tuned in to Hoodwinks, Surviving the Scam, the podcast that's all about turning scams into success. I'm your host, Rita Owens, and I've been exactly where you are, deceived, betrayed, but never defeated. You know what hood like mentality is. Right? That street smart, relentless hustle that some have misused to trick us? Well, this podcast is dedicated to those who've been seived but refused to be broken. Each week, we'll spotlight entrepreneurs who've been scammed but bounced back even stronger. Will expose the scams, reveal their impact, and army with the knowledge to rebuild. We're not just surviving scams. We're thriving beyond them. So if you're ready to turn your setbacks into comebacks, then let's dive in. Hey, Besties. Welcome back to Hoodwink Surviving the Scam. I'm your host, Rita Owens. And today, we're diving into a topic that's both timely and crucial, especially because it's now the holiday season. So you all know the scammers come out during the holiday seasons in Troves. So I wanna make sure that you, my biz besties, are protected. So today, we're gonna be talking about pyramid schemes in the digital age. Now we've all seen them, sometimes without really even realizing what what they are. They pop up in our social media feeds, promising quick cash, effortless earnings, and sometimes even a luxurious lifestyle. I know I've seen them, and I probably have a few in my feed right now. But as the saying goes, if it seems too good to be true, now y'all know the rest. So today's episode is crucial for anybody that is using social media. Now that's whether you're an entrepreneur, someone that's seeking a job, or just Scrolling through your feed. We'll dissect on today's episode what these schemes look like now and how to spot them, and most importantly, you guys, how to avoid them. 1st, let's understand what we're dealing with here. What exactly is a pyramid Scheme. Now a pyramid scheme is a business model that promises payments or services for enrolling others into the scheme, rather than actual sales or products or investments. The biggest warning sign of a pyramid scheme, you guys, is that the primary way For you to make money is by recruiting others, not really by selling a real product or service. Social media makes these schemes more prevalent and more convincing. Why? Because they exploit the trust that we have in our online communities. People are more likely to trust a business opportunity posted by somebody that's a friend or somebody that's a family member. This trust is exactly what scammers count on. Now personally, I have to say that I've been scammed more than once, And I think I've shared this with you guys on previous episodes that, I've not just been scammed once. You know? I've been scammed multiple times, unfortunately. And I have to say that a couple of the times that I have been scammed is because I trusted the recommendation of someone who was a friend or someone who was a social media friend. Right? There's a difference between the 2. Right? That social media friend is somebody that maybe you follow, you've interacted with on social media, you like each other's posts, maybe you've hopped on a Zoom call, you know, things like that where it makes you feel like they are a trusted person that you can, reliably trust their recommendations. So what I'm saying here is that with social media schemes, They the scammers are relying on that trust that you've built up with others in order to push their agenda, which is getting you to sign up and get you into this pyramid scheme. Now here's the thing. Not every opportunity that you see online is a scam. So I wanna make sure that I clarify that. Not every opportunity that you see online is a scam. There there really is a fine line between legal, Multilevel marketing, which are your MLMs, and I'm sure a lot of you guys understand what that means. Right? The MLM opportunities. There's a difference between those and a legal pyramid schemes. The key difference is that with an MLM, You are gonna be focusing on selling an actual product or service. So think of, you know, something like, I see a lot of MLMs for weight loss or makeup, you know, beauty services, things like that where you have someone that hires, you know, someone else and they have a downline and they sell their products, but they actually have something that they're offering to the consumers. With pyramid schemes, there's really nothing that they're offering to the consumers. All they're doing really is just having you recruit more people into that scheme and get you to sell. So let's go ahead and look at a common scenario. Now imagine you're scrolling through your social media And you come across a post from maybe one of your old friends, maybe someone in high school or college, from your church, whatever. Right? Now they're talking about this super incredible business opportunity. They're showing off their lavish lifestyle. They're claiming that it's all thanks to This amazing program that they've joined. Right? They're super enthusiastic about it. They're convincing. They're Telling you that you should do it, you should be a part of it, because if you are, then you can live this lavish lifestyle and make all this money like they're doing. Right? And they make it sound so easy. Well, what are you gonna do? Well, first, let's break down the red flags here. Number 1. One of the biggest red flags is that the focus is on recruiting. If the post talks more about bringing in new people than actually selling a product, I want you to be wary of that. Next, you wanna go ahead and you wanna consider what the products themselves are. Are they legitimate products? Right? So if that friend is posting that they've made all this money by selling, I don't know. A skinny detox tea. Right? Like, is this going to be a product that you feel like you can sell? Is this a valid product? Does it even exist? Right? Are they legitimate? Is it overpriced? Can you find similar products elsewhere at a more reasonable price. And if that Fred is talking more about the money and the houses and the cars and the lavish lifestyle that they're living, Instead of talking about their passion for selling the product or service, that's something that you wanna watch out for as well. A couple of other key things that I've noticed in these pyramid schemes are people telling you that you can make a whole lot of money for A very small investment in a very short amount of time. Those are huge red flags that you need to be aware of. Now let's discuss how you're gonna protect First of all, the Internet itself is a powerful research tool. You guys gotta use it. Right? And I say that for myself too because as I mentioned, I've been scammed multiple times before. But it's so amazing How much information we can actually uncover if we just use the Internet? If we use the Internet to Google search, if we use the Internet in order to get, you know, reviews or recommendations, reach out to other friends, whatever. The Internet is a tool. It's there for you to use. You wanna make sure that you're using it. What I want you to do is look up the company name with words like review or scam, or complaint. I want you to visit their their official website, and I want you to take a look at it. Is the website professional? Does it look like it was just thrown up overnight? Is it something that I look for things like even misspelled words or if the website itself is even complete. Because a lot of the scammers, especially during this holiday season, They put up these quick websites, and you can click on the links and they go nowhere. Right? All they're looking to do is collect your money. Now I want you to also look at the website for the its focus. Okay? Does the website focus more on products, or does it focus more on recruitment? It's also crucial for you to take a step back and get an outside perspective. I want you to talk to somebody. If you're a business owner and you have a mentor, I want you to go to your mentor. Okay? I want you to go to your mentor, and I want you to talk to them About this business opportunity that you're interested in. That's what your mentor is there for. Okay. A lot of times and and I'm guilty of this myself. I might see something and I'm thinking and most of the time, it's due to sense of urgency. Right? They're like, if you don't get in now, you're gonna miss out. Right? That fear of missing out, that FOMO. But the few times that I have been scammed is because I didn't go to my mentor and say, hey. Look. I'm looking at getting into this business opportunity. What do you think? If I had only gone and asked my mentor what they thought, it literally could have saved me 1,000 of dollars, but I didn't do that. And I want you guys to not make that same mistake. So go to your mentor, ask Them about the opportunity that you are looking to get into. And if you don't have a mentor, you can always talk to a business savvy friend or even look into things like online forums. Right? So there's Reddit. There's Facebook groups. There's places that you can go to and search For information regarding the company that you're interested in or companies like the one that you're interested in. Now here's a little word of advice. If you are searching for a company that you're interested in and you cannot find any information on that company, It's probably a sign that either the company is too new, so its business model isn't tested, or that that company maybe is scrubbing their reviews, or scrubbing their complaints. So you wanna make sure that you are careful when it comes down to that as well. Now one of the things that I want you also to remember is that your instincts are powerful. If something feels off to you, then most likely it probably is. I want you to not feel pressured into making these quick decisions because, You know, your hard earned money is involved. And with these scammers, that's exactly what they want you to do. They want you to not think about it Too hard. They want you to jump right into it. And before you know, you're involved in this pyramid scheme with no way to get out. So It's really important for you to trust your gut and also be sure to think things through. So I wanna share a little story with you guys. Sometime last year, I decided that I wanted to get into cryptocurrency and trading, and so I joined this group where that's all they talked about. Right? That's all they talked about were, how to make money in crypto, you know, by buying and selling. And so I was very intrigued, and I started investing in some cryptocurrency. Now one of the members of the group presented this opportunity to us that was supposed to allow us to, buy and sell super easily. Right? That is basically like you You purchase the crypto and you put it into this this application, and it's supposed to trade on your behalf, and you just sit back and you just collect The monies. Now what I didn't know at the time was that this was actually a pyramid scheme. This person Had somebody else above them that their job solely was to recruit us and to get people to sign up for this application. And the way that we would get paid is by signing up more people to this application. Now, unfortunately, this application did nothing, and a lot of us ended up losing, all of our money that we put into this application. But the whole premises of this business was for you to go out and recruit people by promising that if you use this particular application, That your life was gonna be made so much easier even if you didn't know how to buy or buy or sell or trade, crypto, that the machine would do it all for you, and all you needed to do was come to the table with the monies. Okay? It's unfortunate that I fell victim to this scheme. However, right, the red flags were there. As I mentioned Before, if it's something that seems too good to be true, then most likely it is. So I wanna share that story with you guys so that you understand That these pyramid schemes come in all shapes and forms. In that group, I had many friends who I trusted that, we're doing it seemingly. Right? They're like, yeah. We're doing it. But, again, their job was just to get me excited, to bring me in so that I could then sell to my friends and family, right, and get them involved so that I could make money. So I say all of that to say this. My experience is not unique. Right? There's a lot of people who fall victims to these pyramid schemes, and they're gonna continue to fall victim to these pyramid Schemes because, really, they're just very well crafted and especially with social media. But, you know, that's what this Podcast is all about. It's about learning from our experiences and helping others to avoid similar pitfalls. So that's why I share this story with you guys because I wanna make sure that you have all the tools that you need in order to avoid things like these pyramid schemes. Now before we wrap up, let's go ahead and summarize what we've talked about today. Okay. The first thing is I want you to be cautious of all of the opportunities that are being presented to you. If those opportunities are emphasizing recruitment over sales, then most likely, that is the making of a pyramid scheme, and you wanna make sure that you steer clear of those. Also, you wanna make sure that the products and the services are actually legitimate and valuable products and services. And you wanna also make sure that you're always doing your research. Please don't let the allure of easy money blind you to the reality of these schemes. You guys, I I've been watching my timeline as Well, on Instagram, for example, and I see a whole lot of reels, right, where, people are talking about how they're making 1,000,000 of dollars by selling a $7 course. I'm sure some of you who are listening have seen these, particular, listings or advertisements. And I know a lot of people have commented about whether or not This is a pyramid scheme or is it MLM? And my my take on that is that it sounds more like MLM because it does sound like you're gonna get a product, which is another course to basically tell you that the way that you make the $1,000,000 is by selling the $7 course That tells you to sell the course? So very confusing, but it also seems like a hybrid. Right? Like a Hybrid of a pyramid scheme in an MLM, but I digress. But I mentioned that because that's one of the things that I've been seeing online a lot. It's coming up on my timeline a lot, so thought I would just drop that. Now in a world where social media connects us all, The lines between genuine opportunities and scams really can be blurred, you guys, but I want you to remember that your knowledge is your best defense. I want you to educate yourself about the signs of pyramid schemes. I want you to stay informed about the latest trends and scams, and always keep a healthy skepticism when approached with any too good to be true business opportunities. Now Let's talk about the aftermath. What if you or someone you know has fallen victim to a pyramid scheme? 1st, it's really important for you to not blame yourself. These schemes are designed to deceive, And I mentioned that to you earlier. I have fallen for these schemes before, and I've been scammed before. So you would think that I would know What all the telltale signs are? No. These schemes are designed to deceive you. The best step forward is to just cut your losses, Report the scheme to the authorities and then also share your story to prevent others from falling into the same trap. As we come to the end of today's episode, I want you to remember one thing. Your path to success is uniquely yours. It may be tempting for you to jump at every opportunity that promises a shortcut. But real success, especially in entrepreneurship, comes from hard work, smart decisions, and learning from both successes and setbacks. So biz besties, Let's stay alert. Let's stay informed. And above all, stay true to your entrepreneurial journey. We are here to build your dreams, And sometimes that means taking the long and steady road rather than the risky shortcut. So that's a wrap for this episode of Hoodwink Surviving the Scam. We've peeled back the layers, exposed the fraud, and most importantly, we've learned how to bounce back stronger than ever. If you found value in today's episode. I would be so grateful if you could leave a review and share this podcast with someone who needs to hear it. Also, if you're someone who'd like to share your story, please reach Out to me, I will leave the information in the show notes because I'd love to invite you to be on the podcast in order to share your story and how you were able to grow beyond the scam. But before you go, don't forget to sign up for my email list so that you can be the 1st to know about upcoming episodes, exclusive tips, and you'll also get access to our community of resilient entrepreneurs just like you. Until next time. Remember, we're not just surviving scams, We're thriving beyond them. Stay savvy. Stay empowered. Signing off. This is Rita Owens. Take care,