MLM Red Flag Checker
Network marketing or pyramid scheme? Answer 15 short questions about the company. You will see every warning sign, and what to ask before you pay anything.
This is a checklist, not a legal ruling. Next step: put your real costs into the direct selling income calculator.
What this tool does
It turns the most common warning signs of a pyramid scheme into 15 plain questions. Each sign has a weight. The worst signs — getting paid just for signing people up, or being told to borrow money — count the most. At the end, you see a score, a list of every red flag you found, and a list of things you still need to find out.
When to use it
- A friend or relative invites you to a "business opportunity" meeting.
- Right after a presentation, before you pay anything.
- When someone says "decide tonight" — open this page first.
- If you already joined and something feels off.
How to read the result
- Few flags (green): the structure looks like a normal sales business. It can still be hard to earn. Do the maths next.
- Be careful (yellow): some serious signs. Get the missing answers in writing before you pay.
- Many flags (red): step back. The money here likely depends on recruiting, not on real customers.
- Stop signs: a few answers show a red "stop" box no matter what your score is. Those are the core of a pyramid scheme.
- "I don't know" counts half. A good company makes these answers easy to find.
What it cannot tell you
- It cannot say if a company is legal in your country. Only a court or regulator can.
- It does not check any company's records. It only uses your answers — so answer honestly, not hopefully.
- It cannot tell you how much you will earn. A clean structure can still leave most members with little profit.
- It is not financial or legal advice.
Questions people ask
Can this tool tell me if a company is legal?
No. Only a court or regulator in your country can decide that. The tool shows warning signs based on your answers, so you know what to question before you pay.
What is the biggest sign of a pyramid scheme?
Being paid mainly for bringing in new people, instead of for selling products to real customers. If the money stops when recruiting stops, that is the core of a pyramid.
Is every MLM a pyramid scheme?
Not by law. An MLM that pays people for real sales to outside customers can be legal. But even legal MLMs often leave most members with little or no profit, so check the numbers too.
Why does "I don't know" count against the company?
Because a good company makes these answers easy to find. If you cannot find the income disclosure or the buyback rule, ask for it in writing before you join.
Is my answer saved or sent anywhere?
No. Everything runs inside your phone or computer browser. Nothing is stored or sent.