Máire Geoghegan-Quinn
Question:196 Mrs. Geoghegan-Quinn asked the Minister for Enterprise and Employment whether a company (details supplied) is engaged in activities which are against consumer law and amount to pyramid selling. [6019/95]
Written Answers. - Pyramid Selling.
Pyramid selling is prohibited by the Pyramid Selling Act, 1980. The Act creates two offences: section 2 (1) provides that "the promoter, or any of the promoters of, or a participant in, a scheme or a person acting on behalf of the promoter, or any of the promoters of, or a participant in, a scheme shall not induce or attempt to induce a person to become a participant in a scheme".
Section 3 (1) provides that "If any person who is a participant in a scheme or has applied or been invited to become a participant in a scheme—
(a) makes any payment to or for the benefit of the promoter of or (if there is more than one) any of the promoters of, or a participant in, the scheme or a person acting on behalf of a promoter of, or a participant in, a scheme, and
(b) is induced to make that payment by reason that the prospect is held out to him of receiving payments or other benefits in respect of the introduction of other persons who become participants in the scheme.
any person to whom or for whose benefit that payment is made shall be guilty of an offence".
The Act specifies those elements which must be present in a "scheme" before it can be regarded as pyramid selling within the meaning of the Act. Any multi-level marketing activity containing those elements would bring such an activity within the scope of the Pyramid Selling Act.
Enforcement of the Act is a matter for the Garda Síochána. If the Deputy is aware of a suspected breach of the Act, she should report it to the Garda Síochána. Fraud Section, Harcourt Square, Dublin 2.
The interpretation of the Act with regard to any particular scheme is ultimately a matter for the courts. For my own part. I would urge the public to exercise extreme caution in relation to participation in any form of multi-level selling activity.