Perth pyramid scheme collapses Graeme Eddington of Eden Hill prosecuted
Issue Date: - Tuesday, 20 May 2008
A Perth man has been convicted of six counts of promoting or taking part in the promotion of a pyramid scheme contrary to the Fair Trading Act.
Graeme Eddington of Eden Hill was fined $6,000 with costs of $3,437 in the Perth Magistrates Court last Friday.
Mr. Eddington promoted a scheme known as the David Rhodes Chain Letter.
In handing down her decision, Magistrate Barbara Lane considered that Mr Eddington had treated the matter as a joke and did not take the Departments warnings seriously. He tried to circumvent the Act and played a game of cat and mouse with Consumer Protection.
She also noted that Consumer Protection always preferred to educate offenders into ceasing their behaviour rather than take prosecution action.
Consumer Protections public warnings about the David Rhodes Chain Letter started back in 2004 and included a national media campaign and mass destruction of scam letters. This was followed by the investigation of local promoters who failed to heed warnings and continued to participate in the scheme.
"The pyramid scheme being promoted by Mr. Eddington first came to our notice in 2006 after we received two complaints from members of the public," Consumer Protection Commissioner Anne Driscoll said.
"We responded by contacting Mr. Eddington twice to cease promoting the scheme but after then receiving four more complaints from consumers, we commenced prosecution procedures in the public interest.
"Mr. Eddington even warned other participants in the scheme that Consumer Protection may send them an undertaking and that they should not sign it as doing so would be more financially damaging than any potential fine.
Those consumers who contacted us should be congratulated for bringing this matter to our attention. Such schemes prey on the vulnerable, and we will act to prevent this," she said.
It is illegal to promote or take part in a pyramid scheme in any way under the Fair Trading Act and heavy fines apply when caught.
Anyone receiving these letters in the mail should not respond in any way and should forward the letter they receive to WA ScamNet, Reply Paid 64772, Locked Bag 14, Cloisters Square, WA, 6850. A postage stamp is not required.
Anyone with information concerning those who are promoting the David Rhodes Chain Letter or any other pyramid scheme should contact Consumer Protection on telephone 1300 30 40 54 or email consumer@docep.wa.gov.au . Reports are confidential.