"My friend wants me to sell beauty products, but I think it might be a pyramid scheme."

One of my biggest irrational fears in life is inadvertently becoming involved in a pyramid scheme, and then feeling like an idiot. 

I’m paranoid. The problem, of course, is that I can’t say no. If you ask me to do something, I will reply with every response imaginable other than a straight up, ‘NOPE.’

I’ve donated money to dubious causes. I’ve worked jobs I hated. I’ve tutored intolerable adolescents for free. So if anyone is ever going to be the victim of a pyramid scheme, it’s me. But short of approaching people and yelling “ARE YOU TRYING TO SELL ME A PYRAMID SCHEME?” I have no idea how to avoid them.

Especially now. Because I think it’s… started.

You see, last night I was on Facebook, as always, when I got a message from an overseas friend. About products. Beauty products, to be precise.  She wanted to reach out to me because the ~company~ she works for in the US is launching in Australia, and she needs 'consultants' to sell the products.

"People are making 100K a year," she told me, which is definitely not a true statement. "I just wish I had started earlier."

She said the products are used by Ellen DeGeneres, which sounds very fake, and that they're "the best in the world."

If they're the best in the world, I thought, why can't I buy them at David Jones? Or a fancy skin care store? Why are they sold by independent people?

I awkwardly tried to say I was very disorganised and would probably be terrible at it, but could definitely ask some friends (not). She said that if I recruited some friends to be 'consultants,' there would be money in it for me. Ummm, OK.

So I knew I needed to find out once and for all: What is a pyramid scheme, and is my friend trying to con me into one?

Listen to the Mamamia Out Loud hosts debate what you should do if your friend is trying to sell you something. Post continues after audio.

According to the ACCC's Scamwatch site, it's against the law to participate or promote in a pyramid scheme. Here are the major warning signs:

• You are offered a chance to join a group, scheme, program or team where you need to recruit new members to make money.

• The scheme involves offering goods or services of little or doubtful value that serve only to promote the scheme, such as information sheets.

• There are big up-front costs.

• The promoter makes claims like ‘this is not a pyramid scheme’ or ‘this is totally legal’.

Goodness. It sounds a little bit like I was meant to recruit new members to make money, but I guess there really was a product to be sold - even if it's not actually used by Ellen DeGeneres. I wasn't told of any up-front costs, and my friend didn't find it necessary to assure me of the legality of the business, so maybe it's not a pyramid scheme? Maybe it's just... annoying?

After some research, the general consensus seems to be that pyramid schemes have one thing in common: the main source of income for individuals isn't the sale of products or valuable services, but the recruitment of further members.

"Usually, new members will pay money to join, and they receive payments depending on the number of members they recruit," writes Meredith Cridland for Choice.

"Sometimes there are products or services that are sold as part of the scheme, but they tend to be worth very little or they're not related to the returns that are promised."

So it seems I perhaps overreacted to my friend's messages. The business she's part of doesn't sound like a pyramid scheme. But after some digging, I discovered exactly what it is: a multi-level marketing scheme (MLM), and even though these are technically legal, that doesn't mean it's a good use of people's time or money.

Listen: Why Uber for kids is the best business idea ever. (Post continues after audio.)

Robert L. Fitzpatrick, author of False Profits — a blog tackling multi-level marketing and pyramid schemes — says at best, MLM recruiting is "awkward, annoying and manipulative" and at worst, can lead to "rancour, alienation and loss of trust".

"MLM is, in fact, the only business on earth based entirely upon the commercialisation of personal relations," he says. "A fundamental contradiction that obviously could not work."

I think this is what sits so uncomfortably with me: I don't want to commodify my relationships. I don't want to leverage my social network. And I don't want others to think of me as a potential source of their income.

So while I can't say no, I can just ignore any future requests to get involved with my friend's MLM. That way, I won't end up feeling like an idiot.