Taking a card and giving money to its owner and five other people, in a pyramid scheme

This scheme involves gambling and consuming people’s wealth
unlawfully, both of which are clearly forbidden as Allaah says
(interpretation of the meaning): 

“O you who believe!
Intoxicants (all kinds of alcoholic drinks), and gambling, and Al‑Ansaab
(stone altars for sacrifices to idols, jinn, etc), and Al‑Azlaam (arrows for
seeking luck or decision) are an abomination of Shaytaan’s (Satan’s)
handiwork. So avoid (strictly all) that (abomination) in order that you may
be successful.

91. Shaytaan (Satan) wants only to excite enmity and
hatred between you with intoxicants (alcoholic drinks) and gambling, and
hinder you from the remembrance of Allaah and from As‑Salaah (the prayer).
So, will you not then abstain?”

[al-Maa’idah 5:90-91] 

“O you who believe! Eat not up your property among
yourselves unjustly except it be a trade amongst you, by mutual consent”

[al-Nisa’ 4:29] 

The way in which this scheme involves gambling is that the
person who joins it spends his money and gets nothing in return, hoping that
he will get more money. So he is not certain whether he will win or lose,
and this is the definition of gambling. 

The way in which it involves consuming people’s wealth
unlawfully is obvious. No one gains money from this scheme except the ones
who set it up and a small number of those who join it; most of them come out
with nothing but sin and regret. 

Hence in some western countries such schemes are known as
pyramids of illusion or selling air. 

Dr Waa’il Ghunaym, the head of marketing in an e-mail company
says: 

This idea is based on a principle that is akin to gambling,
whereby each person puts his money on the table then the one who is the most
eloquent and persuasive takes it all.  Joining the scheme earlier also plays
a role in acquiring the thousands upon thousands, because the one who starts
it and those who follow him, up to a certain level of the pyramid – which
varies according to how big the company grows and how many levels there are
in the pyramid – are the ones who will earn the large amounts of money. They
are like the gamblers who win big. Their intelligence plays no role in their
huge earnings, all that they do is to convince a number of people to join
and they sit and watch what their followers will do and so on. It remains
that the first one is better off, and the pyramid has different levels, as
follows: 

1 – The kings of the pyramids of illusion. They are the ones
who will earn huge amounts because they joined it first and their numbers
are few 

2 – The dealers of the pyramids of illusion. They are the
ones who will earn something but it will be a very ordinary amount and not
that on which they pinned their hopes. Their number is also few. 

3 – Those who escape unscathed from the pyramids of illusion.
They are the ones who will neither win nor lose, but they managed to get
back the money that they paid in. Their number is moderate. 

4 – The victims of the pyramid, who are more than 80 % of
those who join the scheme. Their number is greater the more levels there are
in the pyramid. 

The number of those who are able to convince others to join
becomes greater the more levels the pyramid acquires. This clearly shows us
that the greater earnings can only come when more losers join the scheme,
because the company will make profits, and the kings and dealers will make a
profit, and this mathematical equation can only be achieved at the expense
of victims of the illusion, who donated their wealth to the kings and
dealers of the pyramid. 

And he said: 

On January 5, 2000 the department of consumer protection in
one of the states of the US issued a warning about a club that was using its
membership cards as a means to propagate these pyramids of illusion. The
Trade Department in that state had already warned about these pyramid
schemes and described them as follows: they promise a quick and certain
profit, and they tell everyone of how successful this idea has been for some
workers who joined the scheme. They are based on face-to-face meetings in
which they use psychological pressure so that a person does not think and
signs up as soon as the presentation ends. The Department stated that these
pyramid schemes are based on lies and that very few of those who join will
make any gains. 

The Canadian government added a clause to its Criminal Code
expressly forbidding any individual or organization to operate pyramid
schemes. The government described these schemes as a program in which a
person pays a sum of money to join the group, in return for attending
lectures or getting some educational material on this subject, then he is
required to try to persuade a certain number of people to do the same. The
Canadian police website states that millions of dollars were collected from
people who joined the scheme and lost their money, whilst a very small
number of people acquired a huge amount of money. 

Robert Carols, author of False Profits, published a
detailed analysis which proves to all that these pyramid schemes are no more
than a fraud that is based on a large number of participants, in which only
the people at the top of the pyramid gain anything; they are usually the
owner of the company and the original members with him.  

The Standing Committee
has been asked about various forms of such schemes, and they have stated
that they are all haraam and that they are kinds of riba and gambling. 

It says in Fataawa al-Lajnah al-Daa’imah (15/212):  

If the matter is as described, then this scheme is a kind of
gambling that Allaah has forbidden in the verse (interpretation of the
meaning): 

“O you who believe! Intoxicants (all kinds of alcoholic
drinks), and gambling, and Al‑Ansaab (stone altars for sacrifices to idols,
jinn, etc), and Al‑Azlaam (arrows for seeking luck or decision) are an
abomination of Shaytaan’s (Satan’s) handiwork. So avoid (strictly all) that
(abomination) in order that you may be successful.”

[al-Maa’idah 5:90] 

And they also said
(15/215): 

This kind of operation is not permissible, rather it is an
evil action and one of the worst of major sins, because it involves riba
al-fadl and riba al-nasee’ah, both of which are haraam according to the
consensus of the Muslims. And it involves toying with people’s wealth and
consuming it unlawfully. In this sense it comes under the ruling on gambling
which is haraam according to the texts of Islam and according to scholarly
consensus. 

And they also said (15/218):  

The transactions mentioned involve ambiguity, riba and gambling, all of which are major sins that incur the wrath and anger of Allaah.