The paper "Riddle of the Pyramids: What Is Herbalife? by Nocera" is a delightful example of an article on business. A pyramid scheme can be defined as an illegal and unsustainable investment scam with a hierarchical structure, which entails promising individual's payment for recruiting other persons into a business that offers a non-existent or valueless product. In a characteristic pyramid scheme, the members at the top make money by enrolling new members in the scheme and promising them high incomes. The new recruits then have to register other members to the scheme in order to earn a fraction of the fees paid by those who enroll below them.
The promoters of pyramid schemes conceal their true purpose by presenting products that are high-priced, of little value, of poor quality and difficult to sell; for this reason, their primary source of income is through recruitment. The author of this course work found it important to analyze the issue of pyramid schemes since it has affected many people globally, both financially and socially. Today, the issue of pyramid schemes has proven to be one of the most tenacious and upsetting frauds for consumers.
They are usually very costly to the people who invest in them. Although there are a few investors who make money out of the pyramid schemes, most of the participants lose a lot of money. The majority of pyramid scheme recruits are close friends and family. As a result, when the schemes eventually collapse, it is likely to break up their relationships. Pyramid schemes are banned by law in many countries and states. For instance, in Washington State, an act of parliament was introduced to curb this menace.
It is my belief that if the correct measures are taken, fraudulent pyramid schemes can be controlled. First, distributors should keep in mind that they are lawfully accountable for all claims they make concerning the company, its commodities and the opportunities it presents. If such a company is to recruit new distributors, it should avoid promising unrealistic income to avoid being held responsible by law. Secondly, consumers should be educated about ways of identifying pyramid schemes. The government should task itself with the role of delivering consumer alerts to the public in order to notify consumers of unfair and deceptive business habits.
Thirdly, all countries and states should formulate laws that aim at curbing pyramid schemes. It should be ensured that pyramid schemes are illegal in all countries and states. Lastly, the consumer should be careful, not to invest their money in ventures that require them to enroll more investors in order to pocket more money or recover their initial investment. Consumers should ensure that they authenticate the genuineness of any investment before investing.
If a consumer comes across a suspicious investment opportunity, they should report to the relevant authorities. In conclusion, it is evident that most pyramid schemes are usually disguised as multi-level marketing programs and are difficult to identify. Many people, involved in a pyramid scheme, invest a substantial amount of time investing in these pointless undertakings. Pyramid schemes are unsustainable and are doomed to flop eventually.