MLM Scams: Recognizing and Avoiding Them

Red Flags on MLM Scams You Need to Recognize

A lot of people are trying to find ways that they can make money. Many of them turn to MLM opportunities, which typically morph into MLM scams.

The first thing is to remember the number one rule in business – if an opportunity sounds too good to be true, it probably is. If someone tells you that with their program all your dreams will come true but for a small fee (like $20), then chances are this is not legit. Legitimate programs do not require large sums of cash front; there may be some initial investment, but it should be very small.


Be on the lookout for red flags such as over-promising and underdelivering. If they promise you a certain amount of money or success in a specific time frame and cannot deliver even close to that, then this is probably not legit. Anyone who says you will get rich overnight without much effort most likely has no idea what they are talking about. Another thing to watch out for is if someone requires your Social Security number before providing any information; do NOT give them this unless you know for sure that it’s safe! The best rule of thumb when investing anything – especially with MLM companies – is to trust your gut feelings.

Finally, beware of any company that claims to be a non-profit organization or charity, because they often are not. There are a lot of legit businesses that provide help to those in need, but people who claim their business is non-profit can be hiding ulterior motives such as laundering money or avoiding taxes.

As with any investment opportunity, it’s important to do your research and learn as much as you can about the company before signing up for anything!