| Pyramid Selling Schemes |
| In Pyramid Selling Schemes, you pay an over-inflated price for various goods or services and also for the right to sell those products to people whom you recruit to the scheme. |
The Australian Securities & Investments Commission (ASIC) gave this recent warning to consumers, which is worth repeating, because it does help understand what can happen if you are not alert.
Your recruits must pay for their right to sell the goods and to recruit their own new members. Occasionally you might find a pyramid scheme that sells nothing at all, except the right to recruit new members.
Wherever the recruitment payment is a substantial part of the reason for joining up, then it?s almost certainly an illegal pyramid scheme.
Pyramids usually collapse because people cannot sell enough to recover the money they paid to join. They find it too hard to sell the overpriced goods or services, especially to family and friends.
Pyramid schemes are illegal. They may sell any kind of goods and services, including financial products and services that ASIC regulates. If the scheme involves financial products and services, contact ASIC. For other products, contact your state fair trading or consumer affairs department.
8th-April-2004 |
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