In an effort to find an online business that works, people often find themselves getting involved with programs that never make them any money at all, in fact it will cost them a great deal of money.  

Programs I'm referring to specifically are the Multi-Level Marketing (MLM) programs and various pyramid scheme marketing. For most people, these programs almost never make them a cent.

Here's how the average program works…

Upon sign up there is generally a large membership fee, anywhere from $900-$1000 or more.  The fee is said to include marketing materials and expert training but in reality the materials are generally very poor and vague and the 'expert training' can be short lived or non-existent.

Once you join and pay your membership fee, it becomes your job to sell the program to other people; the money made from those sales is passed up to your sponsor or the person that recruited you.  At some point in the recruiting process you will get to keep the money from your recruits, depending on the program, you may have to bring in several recruits before you see any money.  The ability to recruit members and continuing to recruit members is the challenge for most people.  Often time’s they then turn to selling the products that the program promotes, but this can also be a challenge because the products are often sold cheaper elsewhere or even free.

Even though these programs are frustrating and anger many people, they are still legal and legitimate marketing schemes.  The problem is that they are preying on the individual that is lured into the promise of earning thousands of dollars a month when in fact it is virtually impossible for anyone to make money at them.  The only ones really making any money are those that started the program at the very top. 

For the most part, the chances of earning what they boast in one month are extremely rare.  So, for the average inexperienced online marketer looking to start an internet home business –  it's pretty much a scam.

These types of schemes and MLM's can be easily spotted if you know what to look for.  Here are things that raise red flags for me:

• A hugely hyped up sales page boasting luxury cars, mansions and how much money they are making.  In some cases there are more enticing pictures and videos than actual useful information about the program. 
• It takes you more than a minute to figure out what they're actually selling, the value provided for the membership or how the plan actually works.
• The refund policy has a very small timeframe or non-existant.  Some programs say they'll offer a refund within 3-5 days but it takes longer than that to even get a program going, so you're likely to go beyond the three days and of course then you've lost your refund and in many cases monthly or maintenance fees are not refundable.
• There's no product being sold or if there is, the product costs more than it would anywhere else. Also watch out if the product is only slightly or vaguely mentioned. 
• There is little to no information about the company mentioned and what is mentioned is vague.

If after that you still feel the urge to take on one of these programs, please do your homework.  Take a look at review sites and research them carefully.  Take some time and make posts in forums asking if anyone has been involved with the program and what their experiences are.  Be careful of people trying to recruit you, ask them to give you real figures and go with your intuition on how legitimate their answers are.  I also recommend doing a 'review' search on your favorite search engine by entering "program name review". 

If you want more information on MLM’s and pyramid marketing schemes, here's a website that has some consumer guides and actions as well as some legal information.   http://www.mlm-thetruth.com/

The bottom line is these programs have no end user value, they only work as long as new members are recruited and if you closely follow any of them you will see that each program only lasts a few years until they begin to fizzle out.

There are hundreds of these programs out there and unless you love working at them and/or have a special talent for recruiting lots of people, I'd avoid them.  Instead find a business model that appeals to you, learn about it and put it into action.  For the amount of money paid into some of these schemes you could have purchased a web host, domain name, a website builder, a training guide or two and you would still have money left over …and you would be earning some money!  

For in-depth step-by-step help on internet marketing and creating an online business that makes you money instead of costing you money study  Internet Marketing Explained by a recognized internet marketer, Armand Morin.