Are Cash Gifting Programs Legal?
The short answer is “NO”. Cash gifting programs are illegal pyramid schemes. I am limiting my discussion to the USA, however other countries have similar laws. 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
