HUNTSVILLE, Ala. - The next time you hear about a new business opportunity characterized as multi-level marketing, look at it twice. Often what is labeled as multi-level is really just a thinly disguised pyramid scheme. So what's the difference?
Multi-level marketing is a money-making opportunity where sales agents recruit other sales agents and receive a cut of their sales for products. Pyramid schemes, which are illegal, promise that participants can make money primarily by recruiting people who then pay for the opportunity to recruit more people.
The key question to ask yourself is whether the majority of the income is made through direct selling of a product or service, or is the income simply by recruiting additional sales people into the program?
Before you invest your time and money into a business opportunity, check out the following tips:
- Beware of any money-making opportunity where the primary income stems from recruiting additional distributors. It may be an illegal pyramid scheme.
- Some programs require independent reps to buy marketing kits, training materials, and inventory at startup. This can require a significant investment from you.
- Be skeptical of high earnings promises. Ask for written substantiation of actual income, before you make any commitment.
- It`s your right to take time to think about investing in any money-making opportunity. Don`t allow other distributors to pressure you into making a snap decision to invest. Talk it over with a trusted adviser.
Another new scam involves Blue Cross Blue Shield health insurance. Blue Cross and Blue Shield of Alabama has issued a consumer alert in response to a fraudulent attempt by Red Medical Billing, WA LLC, to collect past due debt. Blue Cross has informed the BBB they did not contract with Red Medical Billing, therefore no personal information should be shared by you with that company.
Blue Cross Blue Shields wants to emphasis this fraudulent effort is not due to any data breach, but merely a phishing attempt. Client personal health information remains secure. Below are two steps you can take if you receive a communication attempt (phone call, letter, email, etc.) from Red Medical Billing:
Report the communication attempt to Blue Cross by calling the customer service number on the back of your Blue Cross ID card. Customer service is logging these calls and generating reports.
- Report the communication attempt to Blue Cross by calling the customer service number on the back of your Blue Cross ID card. Customer service is logging these calls and generating reports.
- If you receive a letter from Red Medical, please report the letter to the postal inspection service. Blue Cross and Blue Shield of Alabama is continuing to monitor the situation. Do not hesitate to contact Blue Cross if you should have any additional questions or concerns.