PYRAMID SCHEMES WILL GET YOU NOWHERE

Attorney-General and Minister for Justice Kerry Shine has warned consumers to steer clear of a new pyramid scheme recruiting and selling travel programs, and claiming to offer generous cash rewards.

"The Office of Fair Trading is investigating a scheme with links to offices in the Caribbean and India, which lures unsuspecting consumers with the promise of luxury travel and other benefits," Mr Shine said.

"Consumers have reported they were invited to a seminar and asked to pay a joining fee of US$200, or about AU$232, for a 'wholesale access certificate'.

"Participants are told that by encouraging others to join the scheme they will move up the chain and become a 'traveller', which entitles them to discount travel, benefits and regular cash rewards.

"The scheme is currently under investigation but it appears to have many of the common characteristics of a pyramid scheme.

"These include participants having to recruit other people to pay joining fees in order to earn any rewards."

Mr Shine said under the Fair Trading Act 1989, organising and participating in pyramid schemes was illegal and anyone approached to take part should simply refuse.

"Pyramid schemes work by promising victims they will move up the chain and earn money or rewards by recruiting new people to pay joining fees," he said.

"In a typical pyramid scheme the only way to recover any money is by convincing others to part with their money as well.

"Keep in mind if you are required to recruit people rather than sell a genuine product or service, it's a pyramid scheme.

"Recruiting others to join such schemes in order to generate income or rewards is prohibited under the Act and participants can face fines of up to $40,500.

"Consumers should be particularly wary of overseas promotions as in most cases Australian laws cannot protect you once your money leaves the country."

Mr Shine said any consumers who have received emails about this scheme or any other pyramid scheme should report them to the Office of Fair Trading at www.fairtrading.qld.gov.au or by phoning 13 13 04.

Media Contact: Tim Goodwin / Jamie Byron (Office of the Attorney-General) 3239 3478