Ban on Pyramid Selling Act
1. Background
Pyramid selling is a multi-level marketing activity which involves a business charging participants excessive membership fees, before being asked to recruit additional participants who must pay the same fees for their own membership. Pyramid selling has been found to be an illegal financial activity in some countries, and can cause significant damage to those who take part or fall prey to the schemes.
2. Purpose
This Act seeks to protect people from being victims of pyramid selling schemes, as well as from the significant financial losses associated with participation in these activities.
3. Definitions
(A) “Pyramid selling” refers to any recruitment-based scheme in which a business or individual charges participants an exorbitant fee for the promise of earning income from recruiting others into the scheme.
(B) “Participant” refers to any individual who has agreed and been promised the opportunity to earn income from a pyramid selling scheme and has paid the required membership fee.
(C) “Business” refers to any person carrying out a pyramid selling scheme.
4. Prohibitions
(A) A business is prohibited from conducting a pyramid selling scheme in any form.
(B) A participant is prohibited from directly or indirectly procuring another participant to participate in a pyramid selling scheme.
5. Enforcement
(A) The relevant authorities must take appropriate measures to identify and investigate any business found to be violating this Act.
(B) Persons found in breach of the provisions of this Act may be held criminally liable and be subject to appropriate punitive measures.
6. Miscellaneous Provisions
(A) This Act does not affect other applicable laws or regulations related to pyramid selling schemes.
(B) This Act is effective from the date of its promulgation.
(C) This Act may be amended from time to time as may be necessary.
