Scams, everyone has heard of them. Everyone wants to avoid them. But exactly what is a scam? Is it a pyramid scheme? Is it a school? Is it a teaching? Is it something that people think is not right? Or is it fraud? And what exactly is fraud?
We all have heard of scams, rumors of scams, and things like this. According to the Merriam-Webster Dictionary, a scam is “a dishonest way to make money by deceiving people.” A full definition according to this dictionary is “a fraudulent or deceptive act or operation.”
Fraud is another thing. So what is fraud? According to the Merriam-Webster dictionary, fraud is:
- “the crime of using dishonest methods to take something valuable from another person,
- a person who pretends to be what he or she is not in order to trick people
- a copy of something that is meant to look like the real thing in order to trick people”
What is a Pyramid scheme? According to Wikipedia,
“A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
Pyramid schemes have existed for at least a century in different guises. Some multilevel marketing plans have been classified as pyramid schemes.”
So now we have a definition of a scam, a fraud, and a pyramid scheme. Now we have to use these terms to identify if something is one of the above or not. We don’t want to fall for any of the above, but we also don’t want to assume that something is one of the above if it is not. So how do we go about doing this?
That is out next step.
Steps in determining if something is a scam, fraud, or pyramid scheme.