Matrix schemes use the same fraudulent non-sustainable system as a pyramid. Here, the participants pay to join a waiting list for a desirable product which only a fraction of them can ever receive. Since matrix schemes follow the same laws of geometric progression as pyramids, they are subsequently as doomed to collapse.
Such schemes operate as a queue, where the person at head of the queue receives an item such as a television, games console, digital camcorder, etc. when a certain number of new people join the end of the queue.
For example, ten joiners may be required for the person at the front to receive their item and leave the queue. Each joiner is required to buy an expensive but potentially worthless item, such as an e-book, for their position in the queue. The scheme organizer profits because the income from joiners far exceeds the cost of sending out the item to the person at the front. Organizers can further profit by starting a scheme with a queue with shill names that must be cleared out before genuine people get to the front. The scheme collapses when no more people are willing to join the queue. Schemes may not reveal, or may attempt to exaggerate, a prospective joiner's queue position which essentially means the scheme is a lottery. Some countries have ruled that matrix schemes are illegal on that basis.
Be aware that the easiest way to avoid being caught up in the Matrix scam is to not get involved in the first place. Any setup requiring one to buy overpriced merchandise in order to get a free gift is only out for one objective – to sell overpriced merchandise to as many people as possible. You also run the risk of alienating your friends and family buy trying to get them to make these purchases. The most important point is, there is no such thing as getting something for nothing; keep that in mind and you can protect yourself from most scams. If you do get victimized by this scam, contact the Better Business Bureau and report the company for unfair business practices and making false claims.
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