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Use Caution: MLM & Paid Surveys

Updated on February 3, 2011

These days, with unemployment skyrocketing, 401Ks becoming 201Ks, a growing deficit, banks failing and the stock market unease, there are many "companies" preying upon the desperate.

Two types of schemes seem to be leading the pack: MLM (multi-level marketing) and paid surveys.

Before you buy into MLMs or paid surveys, there are a few things you should know.

  • If you seek overnight riches, it's not going to happen unless you hit the lottery. Life is tough and nothing is just going to fall into your lap.

  • If it sounds too good to be true, it is. Advertisements stating you can work 10 hours a week and get rich are bogus. The people who first started a lot of these companies may indeed now work 10 hours a week. They have people beating a path to their door hoping for duplicate results. There is far too much competition on the Internet now for even scams to work to the degree the originators first experienced.

  • Read the fine print!

  • DO NOT participate in "gifting" scams. You will lose your money. These schemes work like chain letters except you send a large sum of money to the person who sent you the letter. When you forward it to say five of your friends, each of them is supposed to send you that same sum and forward it to their friends, etc., etc.

The entire premise of MLMs - regardless of the company - is simple. You buy product one from me. You start your own website and sell the same product to other people (hopefully). These people then follow suit and pay you part of the profits. Then so forth and so forth. Each level pays a commission up the chain. As a result, those who are toward the top of the pyramid, earn commissions from everyone under them. And yes, pyramid schemes are the same thing as MLM.

Getting paid to take survey companies operate a little different. Some companies award you points for taking surveys. These points can eventually be converted into prizes. This will take a long time to accrue. Other companies will send you an email inviting you to take a survey. After answering a question or two, the survey often ends with "you do not qualify" for this particular survey. They then invite you take part in another offer. These offers require you to apply for and receive a credit card or some other service. These pay well when compared to the typical penny or two pay-outs. The difference, though, is you will have to pay money for the new credit card (application fee), music subscription, book club, etc.

If you fail to qualify for a credit card or whatever other service, you get zilch.

In more than three months, I've made less than $20 using several survey companies. Ready to retire! Right.

If you are after prizes, you will be happier with these companies. Many offer reward points for completing surveys and playing games. It will take a LOT of time and effort but you will eventually be able to use these points to obtain a variety of items. Only you can make the determination if it will take too much time to reach your goals.

So what are you to do? Research! Type the name of the company into your favorite search engine in quotation marks. Using the quotation marks tells the engine that this is exactly what you want searched with no deviation in spelling nor splitting up the title. Read all the results which are usually bloggers letting everyone know all about their experience with the company.

There are also websites that provide user-generated lists of scams. 

After you've done your research, it's all up to you. Ask yourself if the company's claims are realistic, are the steps clear, are there any guarantees, etc.

If you find great success, spread the word so others may benefit. If the reverse is true, spread the warnings.

We're all in this together. We live in a society based on free enterprise. If we can't get the money to make purchases, everyone suffers.


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