Issue Date:  -  Monday, 20 December 2004

Chain letter participants busted - David Rhodes chain letter – Pyramid Scheme

Consumer Protection’s operation to oust chain letter scammers has resulted in over one thousand WA people receiving formal warnings to cease operating, and requiring them to give an undertaking to the Department.

“Over the past months we have been conducting an investigation focussing on those who have been participating, that is passing on, the David Rhodes chain letter”, Consumer Protection Commissioner Patrick Walker said.

“There are no true ‘victims’ of a chain letter as those participating are perpetrators, so we have profiled the thousands of letters provided to us through Australia Post and issued formal warnings to those who have been involved.

“Chain letters promote pyramid schemes and as such are crimes”, Mr Walker said.

People in WA who have received and passed on the chain letter have received with their formal warning, a letter of undertaking under the Fair Trading Act requiring them to declare that they will cease all involvement and refund any money received.

Failure to sign and return the letters of undertaking could result in participants being further investigated with a view to being prosecuted.

Individuals face fines of up to $20,000 and companies up to $100,000.

Chain letters can arrive via traditional mail, fax or email. This version is allegedly from a fictitious ‘David Rhodes’ who claims receivers can turn $218 into $77,760 within the first 60 days of operating the ‘business plan’ outlined in the letter.

‘Rhodes’ claims it is a ‘legitimate business opportunity and perfectly legal’, however this is not true.

The scam involves sending $10 to the name on the top of a list, deleting that name and then adding your own name to the bottom of the list before sending the letter to another 200 or more people.
 
Anyone having received one of these letters should forward it to WA ScamNet, Reply Paid 64772, Locked Bag 14, Cloisters Square, WA, 6850.