QLD Illegal Online Money Scheme?

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Sam27

Member
26 November 2014
2
0
1
Hi, My question is this. Is this an illegal money circulation scheme, or is it a legal scheme that makes the founder money? This is basically how it works.

You subscribe to the company for $10 a week. You don't receive any products or services. Your goal is then to get people to subscribe through you and so you receive the $10 from each person that subscribes through you. %20 of all the money you earn is then paid to the person you subscribed through. Meaning that you make %80 of all the subscription fees that signed on through you.

Thanks
Sam
 

Sarah J

Well-Known Member
16 July 2014
1,314
250
2,389
Melbourne, Victoria
What do the people who subscribe get? If they then sign on to a similar position as you (i.e. they get no product or service but have to find more people to subscribe to in order to earn commission) then yes, it sounds a bit like a pyearamid scheme.

Take a read of the action against Herbalife, where the key question was exactly this, whether they were a legitimate business (i.e. multi-level marketing) or a pyearamid scheme:

- "Herbalife hit with investor lawsuit over pyearamid scheme"
- "Is Herbalife a pyearamid scheme"

The key question is whether the majority of the "customers" subscribe to the company to get cheaper herbalife products or whether they did it so they could become "mini-marketers" and on-sell these products to other subscribers for commission. Basically, a company cannot sell an empty product and grow based just on subscribers getting commission selling empty products.
 
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Sam27

Member
26 November 2014
2
0
1
Hi Sarah,

Thanks so much for the reply. It really helped a lot. I'll have a read on the actions against Herbalife, but I'm sure I'll opt out of this one.

Thanks again.

Sam
 

Tim W

Lawyer
LawTap Verified
28 April 2014
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2,894
Sydney
This sounds like a plain old pyearamid scheme.
These are almost always unlawful.
You would be well advised stay well away from it.
 
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Strongarms38

Well-Known Member
16 April 2014
40
8
149
Sounds completely bogus if there's no product then it's a scam. Say no or just delete. Scams are becoming more common every day and virtually impossible to get your money back. This could easily be a robotic send out. ie they send this to millions of people and some are dumb enough to pay. Never give out your personal details of bank details. Even fake utilities are trying these scams on. This is one area I know only too well. The rate of scams occurring via txt or email is enormous. Govt is powerless so awareness is your only defence. Dating scams are common also. Never trust someone online you don't know. Best wishes.
 
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