Multi-level marketing is a form of direct sales allowed by the law. Typically, a multi-level marketing seller has to purchase a starter pack that contains material they need and access to support services before they can start doing business. In a multi-level marketing, the seller’s income is based on their sales volumes, and those of their subordinate network.
In scams related to multi-level marketing, persons hoping to operate as sellers are given empty promises about sales income or other benefits. Do not trust blindly assurances and testimonials where people tell you how much they have earned. Look into the company’s background and read the terms and conditions carefully.
Pyramid schemes are scams that often work similarly to multi-level marketing. However, a pyramid scheme differs from legitimate multi-level marketing in that those who join the scheme get their income from fees paid by new members they recruit, rather than from selling products or services. In other words, the real plan is to collect money from the new members who buy their starter packs. Pyramid schemes are prohibited in Finland and many other countries.
An investment scam may involve an attractive offer to invest in shares, bonds,
cryptocurrency, precious metals or alternative forms of energy. Keep in mind that promises of large profits come with a high risk.
You can recognise a scam from the following signs
- The investment sounds too good to be true.
- You are rushed and pressurised into making a decision.
- “Just for you”, “a limited batch”. A great investment is only offered to a very limited group.
- The telephone call or e-mail message comes from abroad and from someone you do not know. English language is usually used in these scams.
- The service provider does not have an operating licence. This is perhaps the most certain sign of a scam. To provide investment services in Finland, you either need to have an operating licence issued by the Financial Supervisory Authority, or you must have a licence issued by the authorities of another country and notify the Financial Supervisory Authority of providing investment services in Finland.