What is a Chain Gift/Pyramid Scheme?
In order to participate in a Chain Gift/Pyramid Scheme a person makes a payment (joining fee) to one or more participants. Each person who participates invites others to join the scheme and expects to receive the joining fees of other participants to amount of in excess of the money they have put in.Why are they a problem?
There is currently in Gwent and the wider region activity in many communities concerning Chain Gift/Pyramid selling, whilst involvements in the activity may seem attractive e.g. invest £3,000 to expect a return on £24,000 only 1 in 7 of investors will enjoy a profit. Many people lose their total investment.
Information has been received by Gwent Police that persons are discussing the merit of the schemes including reducing the initial investment to make them affordable. There is a concern they may get drawn into such schemes.Is it illegal?
Yes - you commit an offence if you invite another person to join or invest in Chain Gift/Pyramid Scheme or you participate in the promotion, administration and management of such a scheme.What should you do?
- Do not invest in any Pyramid Selling opportunity, however attractive the outcomes look.
- Pyramid Selling comes in many guises, ensure any material received or contact made is treated with suspicion.
- If in any doubt, contact Consumer Direct on 08454 04 05 06.