Do your homework. Check with your local Better Business Bureau and state attorney general about any plan you're considering, especially if the claims about your potential earnings or the product sound too good to be true. The Federal Trade Commission along with a number of state officials announced 33 law enforcement actions against 67 defendants promoting such Internet pyramid schemes. We're committed to taking on the con artists who think they can use the Internet to promote illegal schemes,'' said Jodie Bernstein, director of the FTC's bureau of consumer protection. Officials were announcing the fraud crackdown Thursday in San Diego.
Experts say the Internet has breathed new life into an age-old racket.
Va. What distinguishes pyramid schemes from legitimate multilevel marketing ventures is that they focus on recruiting new members, not on selling products, she said. But the commission alleged that those who signed up received no free lease on a car and no earnings from the deal. The FTC has filed a lawsuit in U.S. District Court in White Plains, N.Y., against the Five Star Auto Club Inc., seeking a permanent injunction and consumer redress. Officials warn that the Internet makes it easy for such fraudulent operations to hide, shut down or move when someone begins to catch on. Well-constructed Web sites might also give the appearance of legitimacy and be more convincing than newspaper advertisements making the same false claims.