A number of Queensland promoters of pyramid selling schemes have been the focus of a joint Queensland Office of Consumer Affairs and Australian Competiton and Consumer Commission crackdown.
As part of the investigation, Consumer Affairs officers searched a number of premises used by the alleged promoters of one scheme. Enquiries are continuing in relation to the promotion of other schemes.
Already, the ACCC has gained an ex parte injunction against Golden Sphere International Inc, Pamela Joy Reynolds and Victor Michael Cottrill, freezing assets in relation to an alleged pyramid selling scheme.
The ACCC has also applied for an injunction in the Brisbane Federal Court, restraining the respondents from engaging in pyramid selling. The hearing has been set down for 1 October 1996. The ACCC expects to file a class action shortly.
Consumer Affairs and ACCC officers warned that selling schemes prey on people's urge to 'get rich quick' but usually only the promoters, or those at the very top of the 'pyramid', benefit, not the sometimes thousands who join with the expectation of rich rewards.
Consumer Affairs said today that promoters and participants faced fines or six months' imprisonment under Queensland's Pyramid Selling Schemes (Elimination) Act 1973.
Under Queensland law, a participant includes anyone who has sold products or induced others to take part in a pyramid selling scheme. Promoters and participants who are convicted can be ordered to pay back monies to those who bought into the scheme.
Additionally, promoters and participants face action under the Federal Trade Practices Act.
The crackdown by Consumer Affairs and the ACCC follows a sudden proliferation of these schemes with the inevitable result that the majority of participants who enter the pyramid at a late stage lose their money.
