What are the hazards of pyramid schemes?

MLM and disguised pyramid selling not only seriously disrupt the normal social and economic order, seriously endanger social stability, but also cause great damage to the business integrity system and social moral system.

(1) disturbs the order of market economy and infringes on many legal objects. The illegal activities of pyramid selling and disguised pyramid selling are often accompanied by a large number of illegal acts, such as tax evasion, counterfeiting, smuggling, illegal fund-raising and illegal trading of foreign exchange. It not only violates the provisions of the state prohibiting pyramid selling and disguised pyramid selling, but also violates many legal provisions such as taxation, consumer rights protection, market order management, finance, foreign exchange management and so on.

(2) Damage to participants and their families. MLM and disguised pyramid schemes not only cause economic losses to participants, but also cause great harm to their families.

(3) Initiating a criminal offence, which brings harm to social stability. MLM caused most participants to lose blood. Some people live in different places, lead miserable lives and even commit suicide by jumping off a building. Some people participate in theft, robbery, fighting, rape, prostitution, gathering people to make trouble and other illegal acts, which have seriously infringed on the safety of people's lives and property and social stability.

(4) It has caused great damage to social morality and credit system. Because the development targets of MLM personnel are mostly relatives, friends, classmates, fellow villagers and comrades-in-arms, their unscrupulous fraud means lead to a serious decline in the trust between people, which in turn leads to the opposition between relatives and friends, the opposition between father and son, and even the destruction of the family.