One of the most common fraud scams are pyramid schemes. These are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. Thus, the goal in a pyramid scheme is to sell the distributorship or franchise and market a product, or to just simply buy into the pyramid fraud scams and purchase huge quantities of products. As a result, it creates an unattainable business model where no sales efforts or strategies have been given to a product (if there ever was one). The end result is a glut of investors and the scheme unfolds. Investors are told, however, that they can recoup their initial investment and generate additional revenue streams for themselves by bringing in new members.

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Moreover, pyramid schemes now come in a wide variety of forms that they may be quite difficult to recognize at the beginning. However, keep one important element in mind: they all promise you very large profits based primarily on recruiting other individuals to participate in a given program. What's worse, many participants in pyramid schemes are "encouraged" (forced, rather) to buy goods or products at excessively high fees with little or no hope of ever really selling the inventory. The result: The inventor simply accumulates and collects dust, while the vast majority of participants end up really being the victims of these pyramid fraud scams. The bottom layer of participants in this scheme are essentially paying into this operation and making money for the top level scam artists. It's an unfortunate situation that occurs on a daily basis and innocent individuals become victims, often losing tens of thousands of dollars in these fraud scams.

It's essential that your employees are aware of these pyramid fraud scams and what resources they have available to them in identifying, understanding, and reporting pyramid fraud scams.

As one of the most common fraud scams, pyramid schemes can be financially devastating. Don't be fooled; protect yourself and your organization by investing in a Fraud Policy and Procedure Manual from fraudpolicy.org.

1. Common Fraud Schemes
2. Pyramid Schemes
3. Ponzi Schemes
4. Letter of Credit Fraud
5. Health Insurance Fraud
6. Credit Card Fraud
7. Occupational Fraud
8. Invoice and Billing Fraud
9. Identify Theft and Fraud
10. Telemarketing Fraud
11. Financial Correspondence Fraud (Nigeria)
12. Bid Rigging
13. Phishing
14. Cashier's Check Fraud
15. Debt Elimination Fraud
16. Work at Home Employment Schemes
17. Tax Fraud
18. Securities Fraud