Announcements like this appear in newspapers, flyers stuck onto utility poles, and even shul parsha sheets. They seek to be offering intriguing business propositions that could provide either the answer to all your problems or a healthy supplementary income. You may hear of them via e-mail, a friend or relative, or an old-fashioned letter in your mailbox. For many frum people, pressed for time, money, and school bills, they appear attractive. But what do they really offer?
Most such schemes are by definition frauds (both in the legal and halachic sense), and the only way of profiting by them is by others losing. Those that are not clear frauds are suspect in some other way, and should be avoided by a ba’al nefesh.
The schemes fall into three categories: Ponzi Schemes, Pyramid selling, and Multi-Level Marketing (MLM). Lets look at each of them in turn.