How to spot a pyramid scheme - Stacie Bosley

Video Statistics and Information

Video
Captions Word Cloud
Reddit Comments

In a perfect world there would be no MLMs and I'd spell check my posts

👍︎︎ 29 👤︎︎ u/KenStillLikesDisco 📅︎︎ Apr 02 2019 🗫︎ replies

Just watched this too. Love TED Ed and very glad they made this video

👍︎︎ 24 👤︎︎ u/cenariusofficial 📅︎︎ Apr 02 2019 🗫︎ replies

If it walks like a pyramid and talks like a pyramid, it must be a...

... "unique opportunity to own your own business via an innovative direct sales network!"

Hopefully, this video helps more folks cut through the BS and realize how pyramid schemes operate today.

👍︎︎ 12 👤︎︎ u/atdnext 📅︎︎ Apr 02 2019 🗫︎ replies

TED-ed’s animations are hands down my favorite thing in the world

look at that shit! those videos are both educational and pretty, it’s the best combination

👍︎︎ 11 👤︎︎ u/notsogingerale 📅︎︎ Apr 02 2019 🗫︎ replies

"You can fight fire with fire by sharing this video to three people you know and having them do the same."

THE SHADE!!!!

👍︎︎ 10 👤︎︎ u/zacharius55 📅︎︎ Apr 02 2019 🗫︎ replies

Veema got so many guys from my unit at Camp Pendleton. Some scumbag SGT went around one night door to door in the barracks suckering young Marines into joining. I lost long time friends for telling them it was a scam. “Fuck you bro you won’t be saying that when I pull up in my Veema BMW. College is a scam!” 100% of them left the Marine Corps with closets stacked with cases of unsold Veema energy drinks that tasted like coagulated horse piss. I hope Marine leadership has started educating young Marines and their families about the dangers of MLMs and Pyramid Schemes.

👍︎︎ 8 👤︎︎ u/Superior_Light_Deer 📅︎︎ Apr 02 2019 🗫︎ replies

5/7. Best video I've ever seen. Perfect score.

👍︎︎ 7 👤︎︎ u/powerlesshero111 📅︎︎ Apr 02 2019 🗫︎ replies

Too bad this didnt get more upvotes!

👍︎︎ 4 👤︎︎ u/jhgalaxy14 📅︎︎ Apr 02 2019 🗫︎ replies

I actually came here after watching that video

👍︎︎ 3 👤︎︎ u/fortnite-dweeb 📅︎︎ Apr 02 2019 🗫︎ replies
Captions
In 2004, a new company called Vemma Nutrition started offering a life-changing opportunity to earn full time income for part time work. Vemma’s offer was open to everybody, regardless of prior experience or education. There were only two steps to start get started earning: purchase a $500-600 kit of their liquid nutrition products, and recruit two more members to do the same. Vemma Nutrition Company grew quickly, becoming a global operation that brought in 30,000 new members per month at its peak. There was just one problem— while the company generated $200 million of annual revenue by 2013, the vast majority of participants earned less than they paid in. Vemma was eventually charged with operating a pyramid scheme: a common type of fraud where members make money by recruiting more people to buy in. Typically, the founder solicits an initial group of people to buy in and promote the scheme. They are then encouraged to recruit others and promised part of the money those people invest, while the founder also takes a share. The pattern repeats for each group of new participants, with money from recent arrivals funneled to those who recruited them. This differs from a Ponzi scheme, where the founders recruit new members and secretly use their fees to pay existing members, who think the payments come from a legitimate investment. As a pyramid scheme grows, it becomes increasingly difficult for new recruits to make money. That’s because the number of participants expands exponentially. Take a structure where each person has to recruit six more to earn a profit. The founder recruits six people to start, and each of them recruits six more. There are 36 people in that second round of recruits, who then each recruit 6 people— a total of 216 new recruits. By the twelfth round of recruiting, the 2.1 billion newest members would have to recruit over 13 billion more people total to make money– more than the entire world population. In this scenario, the most recent recruits, over 80% of the scheme’s participants, lose all the money they paid in. And in real life, many earlier joiners lose out too. Pyramid schemes are illegal in most countries, but they can be difficult to detect. They are presented as many different things, including gifting groups, investment clubs, and multi-level marketing businesses. The distinction between pyramid schemes and legitimate multi-level marketing can be particularly hazy. In theory, the difference is that the members of the multi-level marketing companies primarily earn compensation from selling a particular product or a service to retail customers, while pyramid schemes primarily compensate members for recruitment of new sellers. In practice, though, many multi-level marketing companies make it all but impossible for members to profit purely through sales. And many pyramid schemes, like Vemma Nutrition, disguise themselves as legal multi-level marketing businesses, using a product or service to hide the pay-and-recruit structure. Many pyramid schemes also capitalize on already existing trust within churches, immigrant communities, or other tightly knit groups. The first few members are encouraged to report a good experience before they actually start making a profit. Others in their network follow their example, and the schemes balloon in size before it comes clear that most members aren’t actually profiting. Often, the victims are embarrassed into silence. Pyramid schemes entice people with the promise of opportunity and empowerment. So when members don’t end up making money, they can blame themselves rather than the scheme, thinking they weren’t tenacious enough to earn the returns promised. Some victims keep trying, investing in multiple schemes, and losing money each time. In spite of all these factors, there are ways to spot a pyramid scheme. Time pressure is one red flag— be wary of directives to “act now or miss a once-in-a-lifetime opportunity.” Promises of large, life-altering amounts of income are also suspect. And finally, a legitimate multi-level marketing business shouldn’t require members to pay for the opportunity to sell a product or service. Pyramid schemes can be incredibly destructive to individuals, communities, and even entire countries. But you can fight fire with fire by sending this video to three people you know, and encouraging them to do the same.
Info
Channel: TED-Ed
Views: 5,588,707
Rating: undefined out of 5
Keywords: TED, TED-Ed, TED Ed, Teded, Ted Education, animation, stacie bosley, wooden plane productions, pyramid scheme, pyramid scheme money, vemma nutrition, fraud, economics, investing, investment, ponzi scheme, gifting groups, investment clubs, multi-level marketing, multi-level marketing scam, scam, money
Id: SBGfHk91Vrk
Channel Id: undefined
Length: 5min 2sec (302 seconds)
Published: Tue Apr 02 2019
Related Videos
Note
Please note that this website is currently a work in progress! Lots of interesting data and statistics to come.