 Are Cash Gifting Programs legal? A study by Peter Fuller MBA CA.Published Date: 2008-08-20 16:33:31 WorkOnInternet.com
Enforcement activity can occur at the federal level through the FTC, SEC and U.S. Postal Service and at the state level. Pyramids promise large profits based primarily on recruiting others and not on profits from retail sales. There are even tests to determine if the product being sold is being used to hide the pyramid scheme. Many well known network marketing companies have run into trouble with these laws and had to restructure their compensation plans and rules. In 1979 Amway was found not to be an illegal pyramid scheme by the FTC because their system was based on retail sales to consumers. However the FTC did order Amway to change some of its business practices such as retail price fixing and misrepresenting profit expectations. Cash gifting programs do not even have a product. Some argue that cash gifting is legal because of the tax code. They even quote the sections. Those sections are about how to, or not to, tax gifts. The code contemplates legitimate gifts between family members and friends, not an organized gifting program. If you could rely on the tax code to give legitimacy to cash gifting programs then all pyramids would be legal. In fact the tax code expects you to claim all of your income regardless if it is from a legal source or not. Just ask Al Capone. So you cannot look to the tax code to determine if an income activity is legal or not. Some cash gifting programs are religious based. They prey on you by using religion. They may even contribute to worthwhile causes, however they are pyramid schemes and those at the top are earning all of the money. I was just on such a site and I quote them: "How would you like to receive $800, $2,000, $4,000, $8,000, $16,000, $32,000, and $48,000, or 83,200 Over and Over Again?" They also state "The blessings flowing through this belief system cannot be measured". Systems such as these are preying on the generosity of good people like you. You cannot make money unless you recruit others to join. It is a numbers game that explodes exponentially until it implodes and everyone loses their money. Cash gifting programs are considered illegal pyramid schemes by federal and state law and it will be just a matter of time before your chosen program will be shut down and the bank accounts frozen. Is that anyway for you to run a home business? ------------------------------ Peter Fuller MBA CA lives in beautiful Toronto, Canada. Peter has created a new Network Marketing Community at http://InfinitePotential.com/support to help others succeed with their online businesses. The best part, it's free to join and learn.
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