Multi-level marketing (MLM) schemes are one of the fastest growing types of business. However, little has been written about the ethics of MLMs. This oversight is somewhat surprising, especially because some prominent MLMs have been accused of being pyramid schemes. Pyramid schemes were the number one type of internet fraud in 1996, and the fourth most common form of internet fraud in 1997 (National Consumers League, 1997). This paper examines the nature of MLMs and their similarities with and differences from pyramid and endless chain schemes. The paper argues that MLMs pose some unique ethical issues, issues that are not easy to address or resolve.
Keywords: Ethics, Fraud, Marketing, Multilevel, Pyramid