Issue Date:  -  Friday, 16 September 2005

David Rhodes chain letter warning

Western Australians are again being warned not to participate in the insidious “David Rhodes chain letter”.

In the past nine months, more than 1,860 Western Australian participants in the chain letter have received a formal warning from the Department of Consumer and Employment Protection.

The participants were required to sign undertakings to the Department that they would cease their involvement and refund any money they have received through the scheme.

“This is one of the most prolific pyramid schemes to hit Australia. It is a scourge on our society and we are committed to shutting it down,” said Consumer Protection Commissioner Patrick Walker.

David Rhodes is a fictitious character who claims to have turned $218 into $78,180 in 60 days. 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.

“Don’t believe the letter’s claims of it being a “legitimate business opportunity and perfectly legal”, this is a pyramid scheme and illegal under the Fair Trading Act,” Mr Walker said.

 “There are no “true” victims of a pyramid scheme because people who participate are perpetrating this insidious scam.

“Sooner or later, the scheme runs out of participants and those on the bottom rungs of the pyramid lose their money. Why risk prosecution and losing your money by participating?”

Mr Walker said failure to sign and return the letter 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.

Anyone who received one of these letters should forward it to WA ScamNet, Reply Paid 64772, Locked Bag 14, Cloisters Square, WA, 6850 or by fax on 9282 0862.

Telephone 1300 30 40 54 or email consumer@docep.wa.gov.au