Did you put some money in new money making app comes under pyramid schemes ? If yes,we are going to find out is pyramid schemes australia are legal or illegal ?
It becomes very easy now a days to lure the people with some money making app and they become money magnets for these companies.
As per law ,Pyramid schemes are illegal in Australia.
They are a type of investment fraud that promises participants high returns with little or no risk. However, the only way to make money in a pyramid scheme is to recruit new members. As the scheme grows, it becomes increasingly difficult to recruit new members, and eventually the scheme collapses, leaving most participants with nothing.
The Australian Consumer Law (ACL) prohibits pyramid selling schemes. A pyramid selling scheme is defined as a scheme where:
Participants make money primarily from recruiting new members rather than from selling products or services; and
The number of participants who can make money is limited by the number of new recruits.
It is an offence under the ACL to participate in a pyramid selling scheme, or to induce or attempt to induce others to participate. Individuals face fines of up to $220,000 and corporations face fines of up to $1.1 million.
There are a number of red flags that can indicate that a business is a pyramid scheme. These include:
- You have to pay to join the scheme.
- You make more money from recruiting new members than from selling products or services.
- The business promises high returns with little or no risk.
- The business is not transparent about how it makes money.
- The business is constantly recruiting new members.
If you are considering joining a business, it is important to do your research and to be aware of the signs of a pyramid scheme. You can find more information about pyramid schemes on the websites of the Australian Competition and Consumer Commission (ACCC) and Consumer Affairs Victoria.
What is Pyramid scheme ?
A pyramid scheme is a fraudulent investment strategy where participants make money primarily by recruiting new members into the scheme, rather than by selling products or services. The only way for participants to make money is to recruit more and more people, and eventually the scheme collapses, leaving most participants with nothing.
Here are some of the key characteristics of a pyramid scheme :
- Participants make money primarily by recruiting new members, rather than by selling products or services.
- There is no real product or service being sold.
- The promoters of the scheme make unrealistic promises of high returns.
- The scheme is very complex and difficult to understand.
- The scheme requires participants to pay an upfront fee to join.
- The scheme relies on an ever-increasing number of participants to generate revenue.
How do pyramid schemes work ?
Pyramid schemes work by recruiting new members who pay an upfront fee. These new members are then expected to recruit even more members, and so on. The only way for members to make money is by recruiting new members.
This creates a pyramid-shaped structure, with the people at the top of the pyramid making the most money and the people at the bottom losing money.
Why are pyramid schemes illegal ?
Pyramid schemes are illegal because they are a form of fraud. They promise high returns with little or no risk, but in reality, the only way to make money is by recruiting new members. This means that the vast majority of people who participate in pyramid schemes will lose money.
What are the penalties or fines for participating in a pyramid scheme ?
The penalties for participating in a pyramid scheme in Australia can be severe. Individuals can face fines of up to $220,000 and corporations can face fines of up to $1.1 million. In addition, participants in pyramid schemes can be prosecuted for fraud.
Pyramid schemes Cases in Australia (ACCC)
Lyoness
Lyoness is a loyalty program that operates in a number of countries, including Australia. The Australian Competition and Consumer Commission (ACCC) has alleged that Lyoness is operating a pyramid scheme, and has taken legal action against the company.
iQ Global Network
iQ Global Network is a company that sells educational courses and software. The ACCC has warned consumers about iQ Global Network, alleging that it is a pyramid scheme. The ACCC claims that iQ Global Network members make money primarily by recruiting new members, rather than by selling iQ Global Network products or services.
Arise Global Group
Arise Global Group is a company that sells health and wellness products. The ACCC has also alleged that Arise Global Group is operating a pyramid scheme, and has taken legal action against the company.
Qmunity
Qmunity is a company that claims to provide financial education and investment opportunities. The ACCC has warned consumers about Qmunity, and has said that it is investigating the company for possible pyramid scheme activity.
OneCoinÂ
OneCoin is a cryptocurrency that has been accused of being a pyramid scheme. The Australian Securities and Investments Commission (ASIC) has warned consumers about OneCoin, and has said that it is investigating the company.
Forsage
Forsage is a cryptocurrency that has also been accused of being a pyramid scheme. The ASIC has warned consumers about Forsage, and has said that it is investigating the company.
World Financial Group
World Financial Group is a financial services company that sells insurance and investment products. The ACCC has warned consumers about World Financial Group, alleging that it is a pyramid scheme. The ACCC claims that World Financial Group members make money primarily by recruiting new members, rather than by selling World Financial Group products or services.
Neora
Neora is a skin care company that sells its products through a network of independent distributors. The ACCC has warned consumers about Neora, alleging that it is a pyramid scheme. The ACCC claims that Neora distributors make money primarily by recruiting new distributors, rather than by selling Neora products.
Some other companies which have been investigated by ACCC :
- ArbonneÂ
- Forever Living Products
- MonaVieÂ
- Vemm
If you’re unsure about whether a business is a pyramid scheme, err on the side of caution and don’t join.
Pyramid schemes are a scam. They are designed to take your money and give you nothing in return. If you’re considering joining a business, be sure to do your research and to avoid any businesses that exhibit the signs of a pyramid scheme.
How to avoid pyramid schemes
If you are offered the opportunity to participate in a business that sounds too good to be true, it probably is. Here are some tips for avoiding pyramid schemes:
Be wary of any business that promises high returns with little or no risk.
Do your research before you join any business : Check with the ACCC and Consumer Affairs Victoria to see if the business has a history of complaints.
Ask questions about how the business makes money : If the answers are vague or evasive, be suspicious.
Don’t pay to join a business : Legitimate businesses should not require you to pay upfront to join.
Do your research : Before you invest in any business, be sure to do your research and understand how it works. If you can’t find any information about the business online, or if the information you do find is vague or misleading, it’s probably a scam.
Be wary of high-pressure sales tactics : If a salesperson is pressuring you to make a decision right away, or if they are making promises that seem too good to be true, it’s a red flag.
Ask questions : If you’re not sure about something, ask the salesperson questions. If they can’t answer your questions, or if their answers are vague, it’s a sign that they’re trying to hide something.
Trust your gut : If something doesn’t feel right, it probably isn’t. If you have a bad feeling about a business, it’s best to walk away.
Things to do after scammed by Pyramid scheme
If you think you have been scammed by a pyramid scheme, there are a few things you can do:
Report the scam to the Australian Competition and Consumer Commission (ACCC) : The ACCC can investigate the scam and take action against the perpetrators.
File a complaint with your state or territory consumer affairs agency : These agencies can also investigate scams and provide assistance to victims.
Contact your bank or credit card company : If you paid for the investment with a credit card, you may be able to dispute the charge.
Contact the police : If you believe you have been the victim of a crime, you should contact the police.
Pyramid schemes are a serious problem, but there are steps you can take to protect yourself. By being aware of the signs of a pyramid scheme and doing your research, you can avoid becoming a victim.