Is Chogan a pyramid scheme?

Is Chogan a pyramid scheme? No, at least not in the eyes of the law. Chogan is a direct-selling company that uses a multi-level marketing (MLM) model, which is legal across the EU, and no regulator, in Portugal or anywhere in Europe, has classified it as a pyramid scheme. It is a fair question and I will answer it with facts, because the difference between a legal MLM and an illegal pyramid is not a matter of opinion: it is written into the law, and it turns on one thing, where the money you earn comes from. If it comes mainly from selling real products to customers, it is direct selling. If it comes mainly from signing up new people, it is a pyramid. Below I show you where Chogan fits, and the fair criticisms it does face.

I write this as an independent Chogan consultant, and I say it up front: I earn when you buy and when you join my team. Even so, I have no interest in painting a rosy picture: anyone who joins thinking it is easy money quits within two months and leaves with a bad opinion of me. I would rather explain the model as it is, with the law in hand, so you decide without illusions.

What does the law say about pyramid schemes?

Pyramid schemes are banned across the EU. The rule comes from the EU Unfair Commercial Practices Directive (2005/29/EC), which every member state has written into its own law. In Portugal, where I work, that is Decreto-Lei 57/2008, and pyramid promotion sits on the list of practices considered misleading “in all circumstances”. The law bans setting up or promoting a scheme where a consumer pays in for the chance of a return that comes “essentially from other consumers joining the scheme rather than from the sale or consumption of products”.

Notice the word that decides everything: “essentially”. The law does not ban earning something from recruiting. It bans a system where the return comes essentially from new people paying in, rather than from selling real products. That is the test, and it is the one we will apply to Chogan below.

It is worth separating two things that often get muddled. Promoting a pyramid is, as a rule, an administrative offence punished with a fine, not prison. Prison enters the picture when the case is genuine fraud, which is prosecuted under the criminal code, not the consumer-protection rule. Two different tracks: one administrative, one criminal.

And who polices this? Not the central bank, contrary to what you sometimes read. Central banks warn about financial schemes, like investments or deposits, not about a company selling cosmetics and perfume. For unfair commercial practices, the right bodies are the consumer-protection and market authorities (in Portugal, the Direção-Geral do Consumidor and ASAE). To this day, no authority has classified Chogan as a pyramid or acted against the brand. That is not a clean bill of health: it is only the absence of any ruling to the contrary.

What is the difference between an MLM and a pyramid scheme?

In plain terms, what separates a legal MLM from a pyramid is where the money originates.

In a legal MLM, or direct selling, you earn essentially by selling products people actually want to use. You can also earn by building a team and taking commission on its sales, but that part rests on top of real sales to end customers.

In an illegal pyramid, you earn essentially by signing up new people. The product, where one exists, is only a front that hides the fact that the money comes in through joining fees or by forcing each recruit to buy stock up front. A scheme like that collapses the moment recruitment slows, because there was never any real demand for the product.

There are warning signs that help tell the two apart, and they look a lot like the ones financial regulators use for investment schemes: promises of high, guaranteed earnings, pressure to recruit above all else, a requirement to buy a large amount of stock at the start, and little clarity on how you actually earn. The more of these stack up together, the more it looks like a pyramid scheme.

Where does Chogan fit?

Let us apply the legal test to Chogan, point by point:

• There is a real product. Perfume, cosmetics, home care and supplements, which people buy and buy again. It is not money moving around with no real product behind it.
• You can register only to buy at a discount, with no obligation to recruit anyone and no obligation to hold stock. Plenty of people do exactly that and never sell to anyone.
• Commissions are paid on sales, not per head that joins. You do not get paid for signing someone up, you earn on the volume of product your network sells.

By these criteria, Chogan behaves like an MLM, not a pyramid. Tellingly, that is also what the model’s more serious critics say: legal, with a genuine product, a long way from a money-only scheme.

None of this means earning is easy, and this is where I am straight with you. Chogan does not publish an income disclosure, the document that would show what most consultants actually earn. Without it, nobody can guarantee you numbers. What is known, from industry sources rather than official ones, is that selling to customers alone typically brings in around 100 to 500 euros a month, and that going beyond that means building and keeping a team. None of those figures is guaranteed, and you should be wary of anyone who presents them as certain.

So what are the fair criticisms of Chogan?

Saying Chogan is not a pyramid is not the same as saying everything is fine. There are legitimate criticisms of the MLM model in general, and of Chogan in particular, and you should know them before you decide:

• The weight of recruitment. To move from a small side income to a real one, you need to recruit and lead a team. Anyone promising you can earn a lot “from selling alone” is overstating it.
• Most people earn little. This is the pattern across the whole MLM industry: independent studies repeatedly find that the large majority of participants make little or nothing once costs are counted. There is no Chogan-specific data that contradicts that general pattern.
• Weak transparency. With no public income disclosure, anyone joining is deciding the financial side somewhat in the dark. I gather the legal framing and the brand’s reputation in the guide on whether Chogan is legit.

Honest conclusion: is it a pyramid or not?

So, is it a pyramid scheme? No. On the law that much is settled: Chogan is legal direct selling through MLM, with a real product, and no regulator has classified it as a scheme.

In my view, the question that actually matters is a different one: is it worth it for you? The answer there is more nuanced: you can make some money selling good products at a low price, you can build a team if you enjoy that side and give it time, and you cannot get rich without work. Anyone telling you otherwise is not being honest.

If you are weighing whether to join, first check whether Chogan is worth it in your case, with realistic numbers and expectations.

And if you want to understand the model with me, with no sales pitch, get in touch and I will explain how reselling and the team side work, with the figures in front of you. Prefer to take it slow? Start with the catalogue and try it as a customer first.