Are all pyramid selling schemes illegal?

EugeneB

Does anyone known whether all pyramid selling schemes illegal or only those where scheme claims that you'll have some sort of guaranteed profit?

I mean, if the scheme clearly says that you are not promised to receive any financial benefit and possibly won't received anything at all, will it be legal?

SarahCarer

What would be the point of it?

geordie_joe

SarahCarer wrote: »

What would be the point of it?

Read the post again, but replace the word "promised" in the second last line with the word "guaranteed".

The op is asking if having an earnings disclaimer makes it legal.

Most, if not all, scams have this disclaimer anyway. At the top of the page they say you will earn $7,000 a day if you buy their scheme. But at the bottom of the very long page it says something like "Earnings quoted are estimates only, we do not guarantee you will make that amount".

SarahCarer

geordie_joe wrote: »

Read the post again, but replace the word "promised" in the second last line with the word "guaranteed".

The op is asking if having an earnings disclaimer makes it legal.

Most, if not all, scams have this disclaimer anyway. At the top of the page they say you will earn $7,000 a day if you buy their scheme. But at the bottom of the very long page it says something like "Earnings quoted are estimates only, we do not guarantee you will make that amount".

I did read the post correctly the first time. Still don't see the point of pyramid schemes, however many times I read it.

geordie_joe

SarahCarer wrote: »

Still don't see the point of pyramid schemes, however many times I read it.

OK, I'll explain it for you.

The point of a pyramid scheme is to make money from those people who join below you. The higher up in the pyramid you are, the more money you make, because there are more people below you.

The snag is, if you join at the bottom there may never be people below you, so you never make money, you just give money to those above you.

.

Ypaymore

EugeneB wrote: »

Does anyone known whether all pyramid selling schemes illegal or only those where scheme claims that you'll have some sort of guaranteed profit?

I mean, if the scheme clearly says that you are not promised to receive any financial benefit and possibly won't received anything at all, will it be legal?

Pyramid Schemes are illegal in the UK and many other countries full stop ,regardless of the small print.;)

Here is a recent example of one being closed down in USA.

http://www.cleveland.com/business/index.ssf/2013/01/thousands_lost_cash_in_kentuck.html

EugeneB

Ypaymore wrote: »

Pyramid Schemes are illegal in the UK and many other countries full stop ,regardless of the small print.;)

Here is a recent example of one being closed down in USA.

http://www.cleveland.com/business/index.ssf/2013/01/thousands_lost_cash_in_kentuck.html

I've been looking for related UK legalisation, so far I found in Fair Trading Act 1973 Part XI (http://www.legislation.gov.uk/ukpga/1973/41/part/XI):

118 Trading schemes to which Part XI applies.

1. This Part of this Act applies to any trading scheme if—
   1. the prospect is held out to participants of receiving payments or other benefits in respect of any of the matters specified in subsection (2) of this section; and

Doesn't this mean that if "prospect not held" then the scheme is no longer qualifies as Pyramid?

theseeker1

geordie_joe wrote: »

Read the post again, but replace the word "promised" in the second last line with the word "guaranteed".

The op is asking if having an earnings disclaimer makes it legal.

Most, if not all, scams have this disclaimer anyway. At the top of the page they say you will earn $7,000 a day if you buy their scheme. But at the bottom of the very long page it says something like "Earnings quoted are estimates only, we do not guarantee you will make that amount".

I've been a lil confuse about pyramid or networking but now it's all clear. Btw, I never tried joining one.

Thanks for sharing this post.

maninthestreet

It's the Gambling Act 2005 that makes 'chain-gifting' illegal:

http://www.legislation.gov.uk/ukpga/2005/19/section/43

teamshepherd

How are FLP and such working legally then?
I joined them but never did anything although I know that they are "legit" and I know a handful of people personally who have achieved quite nice levels with them and do that as their sole job.

Ypaymore

teamshepherd wrote: »

How are FLP and such working legally then?
I joined them but never did anything although I know that they are "legit" and I know a handful of people personally who have achieved quite nice levels with them and do that as their sole job.

Because they are not promising participants payment primarily for enrolling other people into the business.