Pyramid Scheme Scam Calculator

Pyramid schemes typically work as a club, where individuals pay their “joining fee” or “gift” or “donation” to people further “up” the pyramid, in the expectation that they themselves will get paid by new recruits who join further “down” the pyramid.

Be wary: they’re frauds, scams, confidence tricks, and illegal in most countries for the simple reason that people are given the fraudulent impression they will definitely make money when in fact they are extremely likely to lose money – unless they happen to be in the top few levels of the pyramid.

It sounds like an easy way to get rich, until you realise that the only way that anybody makes money in a pyramid scheme is by taking it directly from other participants – chiefly friends, relatives and co-workers. Also, it takes a very short time for a geographical or social community to be swamped with scheme members, the vast majority of whom will never make any money from the scheme – as you can see if you run the numbers in our calculator.

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How far down the pyramid are you? Level
Make a guess at how many levels of the pyramid there are IN TOTAL since it started, including levels that have "left" the scheme and your own level. Basically, everybody "above" you in the entire pyramid (ignoring any "splits" or other artificial ways to make you think you're near the top of the pyramid) is on a higher level. If a pyramid scheme has been running for some weeks, there may be a dozen or more levels above you.
How many levels does the money jump?
When you paid into the scheme, how many levels "up" the pyramid was the recipient (or conversely, how many more levels must be recruited in order for you to receive payment)?
How many people does each participant need to recruit?
It’s usual for each participant to recruit 2 new people for the pyramid. This is why pyramid schemes sound so attractive – “Everybody knows two people who want to get rich, right?”. For a more accelerated scheme – particularly those involving large religious groups, dinner-party clubs or other schemes involving “club” structures – it may be a requirement for individuals to recruit more than 2 people.
What is the drop-out rate? %
It’s unlikely that everybody you recruit will take you up on your offer, especially as many are now rightly suspicious of pyramid schemes and multi-level marketing. Use these values to see the effect of a realistic drop-out rate. Evidence is strong that in reality, a drop-out rate of more than 90% is common.