Issue Date:  -  Tuesday, 22 May 2001

Consumers should avoid 'Paul Collins' pyramid scheme

The Ministry of Fair Trading is urging consumers not to get involved in a widespread pyramid scheme that promises at least $200,000 in 90 days for a minimum outlay of $20.

The scheme comes in the forms of a letter, a copy of which was mailed to a Rockingham woman earlier this month.

The letter is signed by Paul Collins, who the Ministry believes is fictional character, and asks consumers to send away for one or more financial reports which each cost $20.

On receiving the reports, participants are told to mail copies of the letter to friends and people from the telephone book, asking them to buy the reports.

The letter infers that scheme participants will receive $20 for each new person they recruit.

Commissioner for Fair Trading Patrick Walker said the Ministry had in the past six years received hundreds of complaints from consumers about the "Paul Collins" pyramid scheme.

"Pyramid schemes are illegal under the Fair Trading Act," Mr Walker said, "Anyone who promotes or participates in a scheme can be fined up to $20,000.

"It is common for promoters of pyramid schemes to offer only a first name and a post box address, or an e-mail address that cannot be traced."

Mr Walker said pyramid schemes preyed on the eagerness of people to get rich quick.

He said the fundamental product of a pyramid scheme had little or no value.

"They rely on the recruitment of new members to grow, but they inevitably collapse and most participants lose their money," Mr Walker said.

"I strongly advise consumers to ignore the outlandish promises of financial success made by this scheme and not to part with any money."

Consumers concerned about issues related to pyramid schemes should contact the Ministry's Call Centre on 1300 30 40 54 for the cost of a local call from anywhere in WA.