Commonwealth Consolidated Acts

TRADE PRACTICES ACT 1974 - SECT 65AAD

             (1)  In this Act:

"pyramid selling scheme" means a scheme with both the following characteristics:

                     (a)  to take part in the scheme, some or all new participants must make a payment (a participation payment ) to another participant or participants in the scheme;

                     (b)  the participation payments are entirely or substantially induced by the prospect held out to new participants that they will be entitled to a payment (a recruitment payment ) in relation to the introduction to the scheme of further new participants.

             (2)  A scheme may be a pyramid selling scheme:

                     (a)  no matter who holds out to new participants the prospect of entitlement to recruitment payments; and

                     (b)  no matter who is to make recruitment payments to new participants; and

                     (c)  no matter who is to make introductions to the scheme of further new participants.

             (3)  A scheme may be a pyramid selling scheme even if it has any or all of the following characteristics:

                     (a)  the participation payments may (or must) be made after the new participants begin to take part in the scheme;

                     (b)  making a participation payment is not the only requirement for taking part in the scheme;

                     (c)  the holding out of the prospect of entitlement to recruitment payments does not give any new participant a legally enforceable right;

                     (d)  arrangements for the scheme are not recorded in writing (whether entirely or partly);

                     (e)  the scheme involves the marketing of goods or services (or both).