Binary Options vs MLM vs Surveys… Which one is the worst type of scam?

There are a few different type of scams/cheap money making schemes that are popular, and that people seem to be falling for. They aren’t always outright scams. Some of them want you to do things that are borderline illegal. Others want you to just rip people of. Some are selling you “training” products that are low quality, while better ones can be found a lot cheaper online or even at the local book store.

The following are some of the more common types of scams.

Binary Options

For those of you that don’t know what binary options is, in its legit form it is basically trade. I can be anything such as FOREX (foreign currency trading) gold and silver, stock market etc.

What binary options scammers do is that they promise you a program that will automatically make trades for you. Just think about how ridiculous that sounds. They usually promise that the program is 100% accurate based on previous “trends” that they have recorded. Often times they don’t really give an explanation at all.

They usually charge you around $250, and usually its for your first deposit into the binary options program. After that a number of things can happen. They can either just take your money and run, but most of the time they do attempt to do something for you. Usually they just give you some program that automatically makes trades for you. Of course, they just do make trades at random, and not after some magic formula that they first claim. Sometimes you get lucky and you make some money at first because you and your program get lucky. Most of the time you just start losing immediately.

How do they make money?

Well that is a good question. Most of the time they are not going to make ALL of the money you give them. Most of them are affiliates of certain brokers, and of course when you sign up through them, they get a commission of the money you deposited. Many brokers have minimum deposits that you have to make in order to do business with them.  That is why the scammer usually asks for $250 or more.

Sometimes the broker themselves are involved with the scam. However, at lot of the times they are not involved. Binary options trading itself is very legit, and that is one of the reasons why the scam is so effective. A few years ago I dabbled in Forex trading for about 6 months, and it was very very difficult and I eventually lost all the money I deposited and I had to give it up. I did pretty well at first though.

A friend of mine tried to make a program himself and he worked on it while I did it live, and once again it worked out pretty well at first but we eventually lost everything in just a matter of hours. Between the two of us we lost about a thousand dollars on Forex.

I am not bashing Forex or binary options in general, but I am just illustrating how hard it is to trade anything. We spent hours and days trying to pull if off to no avail. The fact that someone on the internet can come along and say that they discovered some “glitch” or “secret” that they have exploited is just downright ridiculous.

So how do I avoid this scam?

To  be honest, I would just avoid binary options in general. It is possible to be successful in it, but only with months and years of education and experience in Binary options can you be successful. If you have that kind of education and experience than you really have no need to be here, reading this article LOL. If you must do it, find a legit broker and sign up with them.

MLM (Multi-level marketing) MLM scams are another hot item for scammers.

Actually, I find that most MLMs are not complete scams (although some of them are.)

For those of you that don’t know what an MLM is, it is basically just about recruiting people. They usually have no real product to sell. They are usually the closest thing to a pyramid scheme without actually totally being a pyramid scheme (they usually get by the law on pyramid schemes by offering some kind of cheap training that you can get for free somewhere else, or at a very low cost somewhere else).

They usually use something called membership levels. Membership levels are something that you pay to join. They can be priced monthly or with a one time free, but usually they are a combination of monthly and one time fees. Some of them are cheap and some of them are very expensive. And by very expensive I don’t mean a couple of hundreds of dollars, I am talking thousands and thousands of dollars. The monthly fees can run up to $400 to $500.

So basically, yes, you do have an opportunity to make money with most MLMs, and they expect you to do it by you recruiting your family and friends to pay hundreds to thousands of dollars for training you can get at a higher quality and lower price online or from a much cheaper book.

A lot of the times the training is sold as “training for creating on online business” or whatever, but usually the training actually consists of how to sell the particular MLM product to other people. A lot of the times they don’t provide any hosting or website support what so ever, so you have to pay for that elsewhere, along with your fees for the “training” or whatever they are trying to sell you.

The worst part about membership levels is it controls the amount of commission you make. Usually, you can only get commission on people that join UNDER you, meaning that if you recruit someone and they join at a higher level than you, than you don’t get ANY of the commission. It goes straight to the people on top of the pyramid.  Usually it is not worth it to even promote an MLM unless you go “all in,” meaning that you pay all the one time fees and the monthly fees.

So how do I avoid this type of scam?

It is pretty simple…avoid anything that expects you to make money by recruiting people, unless it is a reputable company that is obviously legit, and doesn’t expect you to spend thousands of dollars to join and get commission, AND most importantly, they have a real product and not just some vague training. As I said you can make money with MLMs…by ripping people of and causing them to spend bankrupting amounts of money. Most people just give up within the first few weeks of joining.

Survey Scams

This is perhaps my favorite one.

The one good thing about survey scams is they are usually very cheap.

So what is a survey scam? Basically, they charge you so you can get paid to take surveys. Thats right. I am not going to go to far into this because if you think your opinion is really that important than go ahead and pay whatever said scammer is asking you.

Usually, even through legit companies, you are going to get paid very little to take surveys. Usually you get paid around 50 cents per survey or lower, and a lot of the times you don’t even qualify demographically. Most of the time it will take you a whole year to pay back the original fee for taking them in the first place.

The scammer will usually promise hundreds of dollar per month. But I wouldn’t quit your day job if I  were you.

However, it is not really a big deal. Usually they just charge $50 or less, with a money back guarantee. 

If you must take surveys, do it for free through a legit company. 

Conclusion

So these are just some of the more common types of scams out there. There are more so don’t be fooled. Don’t sign up for anything that doesn’t give you a free trial and does not appear legit. If you would like to check out my #1 recommendation for making money online, click here!

If you have any comments or questions, please go to the comment area below. Thank you. =)

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8 Comments

  1. Great post where you list some of the worst types of scams. I have tried them all at some stage, except the Binary options one.

    MLM as you say can have good products involved to sell, but the main problem is relying on your downline to do some work, and this can be tricky.

    Far better option is to build your own online business if you can.

  2. I can’t comment on binary options or surveys, but I can comment on MLM’s as I’ve been involved with them in the past. And like you say, many are legit. The legitimate ones are ones that actually have a physical product. But the problem with MLM’s is that the way people make money is by promoting the business rather than the products. It is all about investing lots of money and then recruiting others to do the same. MLM simply doesn’t work because you need to constantly be recruiting.

    • Indeed you are right. MLM is all about recruiting other people to recruit other people and so on. Some MLMs these days have some extra bells and whistles, but recruiting is always the name of the game if you want to make a decent amount of money. As I have said most MLMs are not complete scams, but all things considered they matters well be.

      Thanks for commenting. =)

  3. Very interesting article…but I’m unsure why surveys are included in this?
    Binary Option software and MLM based opportunities are known scams but surveys are simple pocket money type options – sites like Clixsense etc. are extremely popular and over 10 years old!
    You can’t get rich taking surveys but millions of people earn legit money with them every day. They actually paid for my marketing education when I first started out online!

    • I am glad you had a good experience with surveys. I included in my scams list because there are a lot of companies/people who are actually charging people to take surveys. Taking them for free is fine as I mentioned, and it is legit…just like there is some binary options and MLM opportunities that are legit.

  4. Hi, Jeff. You hit us with the usual scams and it’s hard to know which is the worst. Binary Trading seems to be like betting on the over/under in sports. I’be been involved with MLMs and if there is a real product involved, it’s not technically a scam, but if you are forced to buy a lot of crap for resale, it’s getting borderline. Just stay away from surveys. Nuff said. Good article. Thanks for the refresher and the warning.

    • No problem man. I know that not all MLMs are scams, but most of them seem to be a really bad deal for anyone who signs up. Take care. =)

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