pyramid scheme
A pyramid scheme pays you for recruiting other people rather than for selling anything real, and it collapses when recruitment stops.
In plain English
A pyramid scheme is a business model where the product is you.
You pay to join. You then earn by bringing in other people, who pay to join, and who must bring in more people still. Sometimes there is a product involved, often an overpriced one nobody would buy on its own, but the real money comes from recruitment.
The arithmetic is what kills it, and the arithmetic is not an opinion. Each layer needs more people than the one above it. Six levels in, you need more members than there are people in the city. There is no version of this where everybody wins, because the structure requires that most people lose.
It spreads through trust, which is what makes it so cruel. It moves through churches, families, WhatsApp groups and old school friends, and by the time it collapses, the person who recruited you is not a fraudster. They are a victim who also lost money and now cannot look at you.
The test is one question, and it takes ten seconds. Would this business make money if nobody ever recruited anybody again? If the answer is no, walk away, and warn the person who told you about it.
You pay ₦50,000 to join and are told to recruit five people, who each recruit five. By the sixth level the scheme would need over 15,000 members from your line alone. Somebody, and it will be thousands of somebodies, joins last.
Questions people ask
How is this different from legitimate direct selling?
A real business makes its money from selling a product people genuinely want. If the income comes mainly from recruiting, the product is decoration.
What if my friend or pastor introduced it?
That is exactly how these spread. They are almost certainly a victim too. Be kind about it, and still say no.
Is it illegal in Nigeria?
Schemes of this kind are prohibited and the Securities and Exchange Commission regularly warns against them. That has never stopped them appearing under new names.
Last reviewed