Section 24 — Fair Trading Act 1986: Pyramid selling schemes

24 Pyramid selling schemes (1) No person shall promote or operate a pyramid selling scheme. (2) For the purposes of this section, the term pyramid selling scheme means— (a) A scheme— (i) That provides for the supply of goods or services or both for reward; and (ii) that, to many participants in the scheme, constitutes primarily an opportunity to buy or sell an investment opportunity, whether personally or through an agent, rather than an opportunity to buy or supply goods or services; and (iii) That is or is likely to be unfair to many of the participants in the scheme in that— (A) The financial rewards of many of those participants are dependent on the recruitment of additional participants (whether or not at successively lower levels); and (B) The number of additional participants in the scheme that must be recruited to produce reasonable financial rewards to participants in the scheme is not attainable or is not likely to be attainable by many of the participants in the scheme: (b) A scheme of the type commonly known as a chain letter scheme (whether or not it provides for the supply of goods or services or both) that is likely to be unfair to many of the participants in the scheme, in that— (i) The financial rewards of many of those participants are dependent on the recruitment of additional participants; and (ii) The number of additional participants in the scheme that must be recruited to produce reasonable financial rewards to participants in the scheme is not attainable or is not likely to be attainable by many of the participants in the scheme. Compare: 1975 No 113 s 48A; 1979 No 140 s 22(1) Subsection (2)(a)(ii) was substituted, as from 8 July 2003, by section 5 Fair Trading Amendment Act 2003 (2003 No 31). See section 16 of that Act as to proceedings already barred and pending proceedings.