If it looks like a pyramid and sounds like a pyramid...

From the FTC...

The Bottom Line About Multilevel Marketing Plans

Multilevel or "network" marketing plans are a way of selling
goods or services through distributors. These plans typically
promise that if you sign up as a distributor, you'll receive
commissions - for your sales and those of the people you
recruit to become distributors. These recruits sometimes are
referred to as your "downline."

Some multilevel marketing plans are legitimate. However,
others are illegal pyramid schemes. In pyramids, commissions
are based on the number of distributors recruited. Most of
the product sales are made to these distributors - not to
consumers in general. The underlying goods and services,
which vary from vitamins to car leases, serve only to make
the schemes look legitimate.

Joining a pyramid is risky because the vast majority of
participants lose money to pay for the rewards of a lucky
few. Most people end up with nothing to show for their money
except the expensive products or marketing materials they're
pressured to buy.

If you're thinking about joining what appears to be a
legitimate multilevel marketing plan, take time to learn
about the plan. What's the company's track record? What
products does it sell? Does it sell products to the
public-at-large? Does it have the evidence to back up the
claims it makes about its product? Is the product
competitively priced? Is it likely to appeal to a large
customer base? How much is the investment to join the plan?
Is there a minimum monthly sales commitment to earn a
commission? Will you be required to recruit new distributors
to earn your commission?

Be skeptical if a distributor tells you that for the price
of a "start-up kit" of inventory and sales literature - and
sometimes a commitment to sell a specific amount of the
product or service each month - you'll be on the road to
riches. Often consumers spend a lot of money to "build their
business" by participating in training programs, buying
sales leads or purchasing the products themselves. Too
often, these purchases are all they ever see for their
investments.

Your Responsibilities If you decide to become a
distributor, you are legally responsible for the claims you
make about the company, its product and the business
opportunities it offers. That applies even if you're
repeating claims you read in a company brochure or
advertising flyer. The Federal Trade Commission advises you
to verify the research behind any claims about a product's
performance before repeating those claims to a potential
customer.

In addition, if you solicit new distributors, you are
responsible for the claims you make about a distributor's
earnings potential. Be sure to represent the opportunity
honestly and avoid making unrealistic promises. If those
promises fall through, remember that you could be held
liable.

Evaluating a Plan The FTC suggests that you use common
sense when evaluating a multilevel marketing opportunity and
consider these tips as you make your decision:

Avoid any plan that includes commissions for recruiting
additional distributors. It may be an illegal pyramid.

Beware of plans that ask new distributors to purchase
expensive products and marketing materials. These plans may
be pyramids in disguise.

Be cautious of plans that claim you will make money through
continued growth of your downline, that is, the number of
distributors you recruit.

Beware of plans that claim to sell miracle products or
promise enormous earnings. Ask the promoter to substantiate
claims.

Beware of shills - "decoy" references paid by a plan's
promoter to lie about their earnings through the plan.

Don't pay or sign any contracts in an "opportunity meeting"
or any other pressure-filled situation. Insist on taking
your time to think over your decision. Talk it over with a
family member, friend, accountant or lawyer.

Do your homework! Check with your local Better Business
Bureau and state Attorney General about any plan you're
considering - especially when the claims about the product
or your potential earnings seem too good to be true.

Remember that no matter how good a product and how solid a
multilevel marketing plan may be, you'll need to invest
sweat equity as well as dollars for your investment to pay
off.