Help from a Friend? Know About Pyramid Parties

They’re today’s new women's parties, replacing those of old selling cosmetics or storage containers. Only these types of parties have women spending money—and mostly getting nothing in return.

Under the guise of "Women Helping Women," or some other similar sisterhood-friendly name, the parties are nothing more than the same old pyramid parties.

The way they work is even the same. An existing member of the group, one who has already paid their way in, must go out and recruit more than one new member below them in order to move up a level themselves. As more and more people build the base of the pyramid below them, these original members can finally begin to be paid large cash sums. Hence, the pyramid shape comes to mind.

The rhetoric used at today's parties to recruit new members is often persuasive and steeped in emotional pleas. It is this new approach to the decades-old "pyramid" scam that is making large numbers of women believe that it's actually something new and valid.

Why can’t this idea work? Simple mathematics. Sure, the person at the top of the pyramid gets a big cash payment --- it's been financed by the two she recruited and the four they recruited, and so forth. But simple multiplication will show just how fast these schemes can outstrip the population of the entire town, leaving, as always, those who bought in last with no possible way to get their money back.

So the best way for these "Women Helping Women" to keep making money? Keep starting new groups! Then, after about five to ten generations of new buy-ins, dissolve it, move, and start a new one.

What makes otherwise totally savvy women ante up thousands of dollars to join in? It could be that women are encouraged to bring in their closest friends as new members first. The sales pitches are often steeped in "women only" exclusivity, and the false idea that fellow women certainly wouldn’t scam those buying in later. Other tactics, used for years, might include an atmosphere of overblown enthusiasm, where the group is whipped into such an emotional high that signing up at the end of the evening is a seemingly obvious conclusion. Other common psychological ploys include: a demand to make a commitment before leaving the party, pressure to not let the friend down who brought you (unless you sign up, Sue will leave empty-handed), the hope of prizes (typically displayed), or any other distraction that keeps the focus off of the actual nuts-and-bolts reality of the program being presented. There may even be a list of references and testimonials, too, though they could be "shills." Even those who have made the promised profits may speak up, but will still leave out the reality of the program’s limitations.

What if you find yourself in the middle of one of these sales pitches? Remember, you are free to leave, even if you have to fake an illness or another obligation in order to feel comfortable enough to do it. Also, never bring your checkbook or credit cards into this type of presentation, even if you originally think that it’s on the up-and-up. Even stepping outside for a moment to be alone and collect your thoughts can help. Never sign a contract the same night --- even if "one night only" incentives are being offered. Turn them down and have the deal checked out by a trusted legal professional.

If you suspect that you or others have been taken by an obvious scam, then it’s important to report the activities to the appropriate law-enforcement agencies (even if it will mean your best friend from high school won’t be able to recruit enough people to get her investment back). By getting the latest incarnation of the group shut down, you’ll really be living the ideal of "Women Helping Women."