Ponzi, pyramid, and MLM: tell them apart

What you’ll learn in this quiz

Ponzi, pyramid, and MLM pitches often sound similar, but the money flow tells the real story. You’ll practice identifying where returns come from, what’s being sold (if anything), and whether recruiting is the product.

Every question uses 4 options and there’s no timer, so you can slow down and reason through each scenario. Choose your preferred question count and difficulty before you start to tailor the run to a quick refresher or a deeper workout.

Common pitfalls to avoid

Many people mislabel any recruiting-based business as “pyramid,” or assume “registered company” means “safe.” Another frequent mistake is focusing on motivational language instead of concrete details like payout sources, inventory requirements, and refund policies.

• Confusing “high returns” marketing with proof of real revenue
• Missing the key test: are payouts funded mainly by new participants?
• Assuming a product automatically makes it legitimate, regardless of incentives
• Overlooking red flags like pressure to buy starter packs or monthly quotas
• Treating testimonials as evidence instead of audited financials

How difficulty is balanced

Mixed difficulty means you’ll see straightforward definitions alongside nuanced cases that blur the lines (e.g., product-based pyramids, Ponzi-like investment clubs, and borderline compensation plans). The set is designed to build confidence early, then challenge you with edge cases so you learn the decision rules that hold up under pressure.