Unfortunately, those who come up with such scams are usually very good at making them look legitimate and in mimicking real ways to market and sell products. So how can you tell the difference? Let’s take a look at real and legitimate MLM operation method to compare with MLM scam.

The difference between real multi level marketing and an MLM scam is that most scams don’t actually sell a product. Or, they may sell a product (with an exorbitant price) but also charge someone for the right to sell that product. You will need to pay money to join the scheme and the more you invest, the higher the return you will be promised. This is a MLM scam, since you should never have to pay someone in advance to actually work for them!

There is a difference between an MLM scam and a legitimate MLM pay structure. In real multi level marketing, you get commission from your own product sales and the sales of those you recruit to work under you. This is simply a type of pay structure that is perfectly legal and legitimate and should not be confused with an MLM scam. In MLM scam, you get commission when you recruit someone else to invest on the scheme. The problem eventually starts when members/agents failed to recruit enough people to part-in money into the business. At last, these companies would ended up changing their policies, terms and conditions or management structures in order to protect own profits and to stay in business. In most cases, refunds of earlier paid money are almost impossible. Some may just closed down the business, leaving members/agents succumbed into huge losses.