A pyramid scheme is a form of pyramid scheme that involves the sale of various types of products or services to one or more individuals, companies, or entities.
A pyramid is an unlawful and deceptive business practice.
According to the U.S. Department of Justice, pyramid schemes are a serious threat to the economy, including the financial system.
How it works The scheme starts with the sale or purchase of a product or service.
This may include the purchase of lottery tickets, a house, or even a car.
Once the purchase is made, the buyer is expected to pay the seller the purchase price or a portion thereof.
The seller receives a commission.
The buyer then receives the commission, or a fee, for the sale.
If the seller does not pay the commission or fee, the seller is found to be in violation of the law and is subject to criminal prosecution.
The proceeds from the sale are then divided among the buyers and distributed among the sellers in a pyramid scheme.
The pyramid scheme may involve the sale, purchase, or transfer of any or all of the items sold.
Some of the most common types of pyramid schemes involve the purchase or transfer, by one or both parties, of: an interest in a particular stock, such as a share of stock, or other security;