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→Connection to multi-level marketing: added acronym — U.S. Federal Trade Commission legitimate… → U.S. Federal Trade Commission (FTC) legitimate… |
→Connection to multi-level marketing: determiner — pyramid scheme masquerading as an MLM. → pyramid scheme masquerading as a MLM. |
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<blockquote>Not all multi-level marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it's probably not. It could be a pyramid scheme.<ref name="MLM_USA">{{cite web|url=https://www.ftc.gov/tips-advice/business-center/guidance/multilevel-marketing|title=Multilevel Marketing|date=14 July 2016}}</ref></blockquote>
In contrast, pyramid schemes "may purport to sell a product", but often "simply use the product to hide their pyramid structure".<ref name="Valentine Speech"/> While some people call MLMs in general "pyramid selling",<ref>{{Cite book |last=Clegg |first=Brian |title=The invisible customer: strategies for successive customer service down the wire |publisher=Kogan Page |year=2000 |page=112 |isbn=0-7494-3144-X}}</ref><ref>{{Cite book |last1=Higgs |first1=Philip |last2=Smith |first2=Jane |title=Rethinking Our World |publisher=Juta Academic |year=2007 |page=30 |isbn=978-0-7021-7255-7}}</ref><ref>{{Cite book |last=Kitching |first=Trevor |title=Purchasing scams and how to avoid them |publisher=Gower Publishing Company |year=2001 |page=4 |isbn=0-566-08281-0}}</ref><ref>{{Cite book |last=Mendelsohn |first=Martin |title=The guide to franchising |publisher=Cengage Learning Business Press |year=2004 |page=36 |isbn=1-84480-162-4}}</ref> others use the term to denote an illegal pyramid scheme masquerading as
The U.S. Federal Trade Commission warns against becoming involved "in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products."<ref name="ftc.gov">{{cite web |url=http://www.ftc.gov/bcp/edu/pubs/consumer/invest/inv08.shtm |title=Multilevel Marketing |date=4 January 2018 |publisher=Federal Trade Commission |access-date=2018-06-20 |quote=There are multi-level marketing plans – and then there are pyramid schemes. Before signing on the dotted line, study the company's track record, ask lots of questions, and seek out independent opinions about the business.}}</ref>
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