Consumer Fraud Law Firm for Ponzi and Pyramid Schemes
Consumer fraud is an unfortunately common occurrence that comes in many shapes and sizes. Whether it is providing false information to get people to buy a product or service or taking on hidden bank and other fees, these scams are designed to take people’s hard earned cash without providing anything in return. Sadly, many people miss out on legal claims because they don’t consult with a consumer fraud law firm.
Pyramid schemes are one of the most common types of consumer fraud, in which people are promised the opportunity to make money by recruiting new participants into some sort of fraudulent business. These scams often are promoted as a business selling some product or service, but nothing of value is ever actually transferred. Instead, the scheme thrives on membership and other fees paid by new recruits.
Glancy Prongay & Murray is a consumer fraud law firm whose attorneys help people who have been victimized by pyramid schemes and other types of fraud get the full compensation available under the law. We also work tirelessly to ensure that those behind the scams are made fully accountable for their actions. Our lawyers have a strong track record for success and a solid reputation in the legal community for providing comprehensive representation services.
How Pyramid Schemes Work
Pyramid schemes are illegal systems of making money. Some companies that hold themselves out as legitimate “multi-level marketing companies” (“MLMs”) are actually fraudulent pyramid schemes.
The distinguishing aspect of pyramid schemes from other forms of consumer fraud is the importance of finding new recruits to participate in the scheme. The fees that these recruits are forced to pay build over time, creating a false “pyramid” that is based on the need to constantly bring in new blood.
In a common pyramid scheme, for instance, someone involved in the business may ask a recruit to pay $200 for admission, or the ability to sell some product or service. The new recruit is then given strict requirements to enlist more people to also pay $200 to become part of the business. Participants who recruit others receive a percentage of each of the new members’ earnings, as do those who recruited the recruiter. The percentage increases the farther you climb up the pyramid. The more individuals that are added onto the pyramid scheme, the more profit.
The problem is that pyramid schemes only benefit those at the top of the pyramid. Most people are left holding the bag when recruiting runs dry and the pyramid starts to crumble.
Consumer Fraud Class Actions
A person who has been victimized by a pyramid scheme has a legal right to seek compensation from those responsible for their losses.
A class action lawsuit is an effective legal tool for many people considering legal action of consumer fraud. These collective lawsuits allow fraud victims to combine their legal claims into a single lawsuit, rather than pursuing them individually.
There are a number of advantages to pursuing legal action collectively. A class action allows members to pool legal and other costs related to the lawsuit across the class members. That’s particularly helpful for people whose claims may not justify the cost of pursuing legal action.
Class members can also build additional leverage against pyramid scheme and other fraudsters by compiling their claims. A consumer fraud class action combining thousands of claims worth millions of dollars is more likely to get fraudsters’ attention than individual lawsuits seeking significantly less in money damages.
How Our Consumer Fraud Law Firm Can Help You
Glancy Prongay & Murray has successfully sued pyramid scheme operators on behalf of a variety of clients. If you have been ripped off by a pyramid scheme operator, we can help you pursue legal action. If you are considering participating in a multi-level marketing company, our lawyers can help you determine whether it may actually be a pyramid scheme.
Our consumer fraud law firm has been representing people in securities fraud and other similar cases for more than two decades. Our attorneys guide clients through the legal process with experience and personal attention. Call us at (310) 201-9150 or contact us online to speak with an attorney today.