asked the Minister for Industry and Commerce if he has any proposals for legislation to control pyramid selling.
Ceisteanna—Questions. Oral Answers. - Pyramid Selling.
63.
I have only one complaint in regard to a company carrying on pyramid selling and I do not feel that the circumstances justify legislation to deal with the matter. I am, however, keeping a close watch on the position. People have been alerted by Press comment to the danger of paying money for the right to sell goods on an agency basis and I can only issue a reminder to those who may feel tempted to become involved in such an arrangement that they should consider their position and prospects very carefully beforehand.
Is the Minister aware that the firm in question tricks people into contracts involving them in a commitment of £950—it was £1,400 originally but was reduced to £950 if they involved themselves immediately—of which £650 must be paid down and £300 is a debt and, in return, what they eventually get is only £300 worth of goods in retail prices for which they must pay a further £65. There is no protection for people who sign up in this way, who have not read the contract and do not realise the consequences. Does the Minister know that this firm is, in fact, one which was registered here but dissolved on 31st August, 1971, and reregistered on 17th October last, without any directors or shareholders being named and, in fact, the prime movers appear to be two Englishmen, without an address here, Messrs. Black and Holt, and would he agree that the public should be warned that this firm "Holiday Magic (Ireland) Limited" is one that everybody must be aware of in view of the fact that its activities, although not fraudulent from a purely legal point of view, involve depriving people of their money under false pretences?
I am not fully conversant with the details of the cash exchanges outlined by the Deputy but, from the inquiries I have made, I am satisfied that there does not appear to be any legal way in which I can deal with this company. On the face of it, the company is acting within the law. I have been checking on the situation and I am aware that in Britain the Department of Industry and Trade will investigate this pyramid selling, as it is called. Other firms over there practise this. Up to the time the Deputy put down the question I had only one official complaint to my Department. From the information available to me I should like to stress that people should look very carefully at any document before signing it. The operation is not illegal but it nonetheless deserves very close and careful attention.
Would the Minister agree that the fact that he has had only one complaint about what can be described as a fraud derives from the fact that when people are trapped into it the only way in which they can secure a return for their money is by they, in turn, involving other people and if they, in fact, expose this, they lose the possibility of recovering the money they have spent and that, more than anything else, explains the lack of complaints?
I know that from the time a person puts his money in the only hope he has of getting any sort of return is by involving others. That appears to be the only way in which he can hope to recover.
By becoming a promoter, in other words, and bringing in other people.
Yes.
That is what is so dangerous.
Exactly.