According to the provisions of Article 224 of China's Criminal Law, pyramid selling refers to organizing and leading pyramid selling activities in the name of selling goods and providing services, requiring participants to obtain the qualification to join by paying fees or purchasing goods and services, forming a hierarchy in a certain order, directly or indirectly taking the number of people who have developed as the basis for reward or rebate, inducing and coercing participants to continue to develop others to participate, defrauding property and disrupting economic and social order.
Compared with legal financing activities, pyramid selling generally has the following characteristics:
First, introduce to join, that is, you must be introduced by internal personnel to obtain membership; The second is to form a hierarchical MLM network such as "online" and "offline". The third type is double payment. Members can get paid for the products or services they sell, or they can get paid by attracting new people to join the MLM organization. For details, please refer to relevant online introductions and cases.
In a word, illegal pyramid selling is an illegal act with great social harm. Once verified, it will generally be sentenced to a certain term of imprisonment according to law. If it is determined that the other party is engaged in pyramid schemes, it is best to discourage it if possible, otherwise it must be avoided to avoid being pulled into pyramid schemes.