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12/11/2001
Province warned about pyramid scheme
People in Northern Ireland are being urged to be wary of a new “get rich quick” scheme that is spreading across the province.
The scam - known as the “Money Tree” - takes the form of a pyramid scheme where new members are encouraged to ‘invest’ a sum of money in return for promises of increasingly large cash rewards if in turn they encourage other people to become investors in the scheme.
However, despite the promise of substantial payoffs, pyramid schemes do not see the majority of members ever receiving any money, as it is inevitable that when fewer numbers of people enter the scheme, the entire process collapses, leaving ‘investors’ empty-handed.
The Department of Enterprise, Trade and Investment's Trading Standards Service (TSS) has issued an official alert about the scheme. A spokesman from TSS explained: “The methodology of pyramid schemes means wealth for the very few and heartbreak for the many. Money Tree spread across the UK and on the Isle of Wight, where the schemes started, thousands of people have lost thousands of pounds.
“We understand from callers to TSS that the Money Tree in Northern Ireland is particularly prevalent in North Down where it seems to be nearing its conclusion. Investors approached in this area should be particularly cautious.
“There are many variations to the scheme. For example, it would not be unusual for scheme members to offer guarantees to investors, which turn out to be invalid. Also some schemes are asking for as little as £300 to enter.
He added: “These schemes are created by the greedy to prey upon the needy. They are no passport to wealth but rather a trap for the unwary. If you cannot afford to lose £3,000 or £300 then ask yourself if this is the right place to invest your money.”
Pyramid selling is not illegal. While there exists legislation to controls pyramid selling relating to the sale of actual goods, the “ Money Tree” scheme involves the passing on of cash as gifts, and thus it is outside such legislation at present.
However, anyone approached about the “Money Tree” or other get rich quick schemes can contact the Trading Standards Service for advice: call 028 9025 3900 or email – tss@detini.gov.uk (CL)
The scam - known as the “Money Tree” - takes the form of a pyramid scheme where new members are encouraged to ‘invest’ a sum of money in return for promises of increasingly large cash rewards if in turn they encourage other people to become investors in the scheme.
However, despite the promise of substantial payoffs, pyramid schemes do not see the majority of members ever receiving any money, as it is inevitable that when fewer numbers of people enter the scheme, the entire process collapses, leaving ‘investors’ empty-handed.
The Department of Enterprise, Trade and Investment's Trading Standards Service (TSS) has issued an official alert about the scheme. A spokesman from TSS explained: “The methodology of pyramid schemes means wealth for the very few and heartbreak for the many. Money Tree spread across the UK and on the Isle of Wight, where the schemes started, thousands of people have lost thousands of pounds.
“We understand from callers to TSS that the Money Tree in Northern Ireland is particularly prevalent in North Down where it seems to be nearing its conclusion. Investors approached in this area should be particularly cautious.
“There are many variations to the scheme. For example, it would not be unusual for scheme members to offer guarantees to investors, which turn out to be invalid. Also some schemes are asking for as little as £300 to enter.
He added: “These schemes are created by the greedy to prey upon the needy. They are no passport to wealth but rather a trap for the unwary. If you cannot afford to lose £3,000 or £300 then ask yourself if this is the right place to invest your money.”
Pyramid selling is not illegal. While there exists legislation to controls pyramid selling relating to the sale of actual goods, the “ Money Tree” scheme involves the passing on of cash as gifts, and thus it is outside such legislation at present.
However, anyone approached about the “Money Tree” or other get rich quick schemes can contact the Trading Standards Service for advice: call 028 9025 3900 or email – tss@detini.gov.uk (CL)
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