Pyramid and Matrix Schemes

 

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Pyramid schemes offer a return on a financial investment based upon the number of new recruits to the scheme. Investors are misled about the likely returns as there are not enough people to support the scheme indefinitely only the people who set up the scheme are able to make any money.

Matrix schemes are promoted via websites offering expensive hi-tech gadgets as free gifts in return for spending 20 or similar on a low-value product such as a mobile telephone signal booster. Consumers who buy the product join a waiting list to receive their free gift. The person at the top of the list gets their free gift only after a prescribed number sometimes as high as 100 of new members join up. In reality, the majority of those on the list will never receive the expensive item they expect.
 

   


Our advice:

Don't agree to anything, or sign anything at high-pressure meetings or seminars, and don't hand over any money or sign a contract to take part in any multi-level marketing plan until you've investigated it. Take independent professional advice.

 

More advice is available on the Office of Fair Trading website.