In this guide
Checking employers and job offers
Pyramid schemes and 'opportunities' presented as jobs
How multi-level marketing and pyramid schemes are presented as jobs, the questions that separate a sales role from a scheme, and what the FTC says.
How these schemes are presented as jobs
The approach often comes through social media or a friend: 'flexible hours', 'be your own boss', 'we are expanding our team'. The role turns out to be selling products to people you know and recruiting others to do the same, usually after buying a starter kit or stock.
The FTC explains that multi-level marketing companies may call participants independent distributors or contractors, and that a pyramid scheme pays you mostly based on how many people you recruit, not how much product is sold to real customers.
Job or scheme: questions to ask
| Question | Employed sales role | Warning sign of a scheme |
|---|---|---|
| Who pays you? | An employer, through payroll | Commission from your own purchases and your recruits |
| Do you pay to start? | No | A starter kit, stock or training fee |
| How do you earn most? | Selling to customers | Recruiting new members |
| What are you called? | An employee | An independent distributor or business owner |
| What are you told about income? | A stated salary or commission structure | Life-changing earnings, early retirement, quitting your job |
Illustrative example
A recruitment message
- 'Hey! I have been working with an amazing wellness brand from my phone and I am looking for motivated people to join my team. You just need the starter pack to get going. Interested?'
A purchase to start, a team to build and no employer. Ask for the income disclosure and the compensation plan in writing before considering it.
What the FTC advises checking
- How the company says you will make money, and whether income comes from retail sales or from recruiting.
- What you must buy to join and to stay active.
- Whether promises of high earnings are backed by evidence; the FTC says most people who join legitimate MLMs make little or no money and some lose money.
- Whether there is pressure to recruit family and friends.
Before you commit
Do not sign up until
- You know whether you are an employee or a self-employed distributor.
- You have the compensation plan and any income disclosure in writing.
- You know every cost to join and to remain active.
- You have checked the company through official records and independent reports.
- Nobody is pressuring you to decide or to recruit others.
Common questions
Is multi-level marketing illegal?
Not in itself. The FTC distinguishes legitimate MLMs, which pay mainly on sales to customers, from pyramid schemes, which pay mainly for recruiting. Laws vary by country.
Should I list an MLM role on my resume?
You can describe genuine sales or customer work you did in it, accurately and with evidence, like any self-employed activity.
Sources
- FTC: multi-level marketing businesses and pyramid schemesUS Federal Trade Commission · US · checked 3 October 2026
- FTC: job scamsUS Federal Trade Commission · US · checked 3 October 2026
- Citizens Advice: check if something might be a scamCitizens Advice · England and Wales · checked 3 October 2026
Put it into practice
See how Luceria helps with thisDrafted with AI assistance and checked against Luceria’s editorial standards. Examples are illustrative, not real people’s results. Spotted something out of date? Tell us.