Islamabad, The Competition Commission of Pakistan (CCP) has issued a stern warning to consumers about the risks associated with multi-level marketing (MLM) and pyramid schemes, which are often misrepresented through promising quick and substantial returns.

According to Competition Commission of Pakistan, numerous businesses and individuals are actively promoting MLM and pyramid schemes, enticing consumers with the prospect of easy money. These schemes typically require participants to make an upfront payment to join, promising earnings from subsequent recruitments and product sales. However, the CCP highlights that the primary revenue in such schemes is not derived from product sales but from the fees paid by new recruits.

The structure of these schemes is inherently flawed; participants who join early may reap some benefits temporarily, but those entering later are likely to lose their entire investment. The unsustainable model depends on constant recruitment of new members to generate returns for those at the top of the pyramid. Once recruitment slows down, the scheme inevitably collapses, resulting in significant financial losses for the majority of participants.

The CCP has observed that these fraudulent schemes are frequently advertised across various media platforms, including print, electronic, and social media. These advertisements often lure unsuspecting investors and job seekers with offers of unrealistically high returns, requiring them to pay money upfront.

The commission strongly advises the public to exercise extreme caution and conduct thorough due diligence before investing in any such schemes or accepting employment offers promising extraordinary returns. It encourages consumers to verify the legitimacy of the company, assess the sustainability of its business model, conduct online research for additional insights, and consult financial experts if necessary.

To safeguard the public from these deceptive practices, the CCP urges anyone who encounters suspicious investment or employment opportunities to report them immediately to the commission. This proactive approach is vital in preventing potential financial harm to consumers across Pakistan.