Pyramid scheme

Lanz81

what are your thoughts on these? OH has been approached to join one by someone who had a £21k pay out from £3k. are the illegal?

any advice would be much apprecaited.

Stavros_3

No, not illegal (but maybe wrong), but bloody foolhardy. The ones who are 1st in can make, it goes pearshaped later on when new investors don't come forward

McKneff

dont touch them with a barge pole no matter what anyone says to you.
They are a scam and i thought they were illegal in this country but i may be wrong

Reaper

These schemes don't make anything or generate revenue. The only way to make money is to take it off other suckers. Leave it well alone.

RayWolfe

I'm sure the subscribers to Mr Madoff's schemes thought they were onto a good thing.

ManAtHome

They are illegal in the UK
"Since the Gambling Act 2005, it is an offence for a person to invite someone to join a chain-gift scheme or for them to knowingly participate in the promotion, administration or management of a chain-gift scheme."

quote fromConsumer Direct http://www.consumerdirect.gov.uk/watch_out/scams/pyramids-chains/

ad44downey

I think 80-90% lose in a pyramid scheme, only 10% or so gain. So make sure you get in early

SeanW

It's illegal. One aspect of the scheme will be you need to get x amount of people to join, and by doing so you will be breaking the law.

soulsaver

Lanz81 wrote: »

what are your thoughts on these? OH has been approached to join one by someone who had a £21k pay out from £3k. are the illegal?

any advice would be much apprecaited.

Pyramid schemes per se are illegal.. but there are schemes people call 'pyramid' but aren't the legal definition.
If you have to buy 'stock' to be in the scheme, and recruit people who have to buy stock, or you have to put in money to be a member and earn commission by recruiting others to your 'team' who have to put money in then it is pyramid by definition - and illegal in UK.
But if you (don't have to but can) recruit a sales force below you that, say, buys a demo set and then sells as many sets as possible, and can order them as they sell, then that is legal.
So Avon for example is a 'kick back' tier system but perfectly legit & legal, as is Amway and Ann Summers party planning - because recruits don't have to buy stock.
But Holiday Magic in 70s was illegal 'cos recruits had to buy stock to sell before making a sale, whether they'd got a customer or not.
See this article and follow links:
http://moneyterms.co.uk/pyramid-scheme/