Victorian Consolidated Legislation

Fair Trading Act 1999 - SECT 22

Pyramid selling

22. Pyramid selling



(1) A person must not establish, promote or take any part in a pyramid selling
scheme.

Penalty: 240 penalty units, in the case of a natural person.
600 penalty units, in the case of a body corporate.



(2) A person must not induce another person to establish, promote or take any
part in a pyramid selling scheme.

Penalty: 240 penalty units, in the case of a natural person.
600 penalty units, in the case of a body corporate.

(2A) Subsections (1) and (2) do not apply to a scheme for the supply of goods
or services if any payment made or other benefit provided for the goods or
services supplied under the scheme bears a reasonable relationship to the
value of those goods or services.

Note Section 130 of the Magistrates' Court Act 1989 provides that if an Act
creates an offence and provides any exception to the offence and the defendant
wishes to rely on the exception, the defendant must present evidence that
suggests a reasonable possibility of the existence of facts that, if they
existed, would establish the exception.

(3) In this section-

pyramid selling scheme means a scheme for the supply of goods, services or
financial benefit where-

   (a)  a person, in order to take part in the scheme, makes a payment or
        provides another benefit to or for the benefit of any other person,
        whether or not the other person is described in the scheme; and





   (b)  the person who makes the payment or provides the benefit-

   (i)  receives a payment or other benefit; or

   (ii) receives the promise of a payment or other benefit or the promise that
        another person will receive a payment or other benefit-
for-

   (iii) inducing or enabling any other person or persons to take part in the
        scheme; or

   (iv) enabling or assisting participants in the scheme to be promoted,
        transferred or to have their status changed; or

   (v)  providing participants in the scheme with, or enabling participants in
        the scheme to be provided with, training, facilities or other
        services- whether or not the scheme or any agreement under or related
        to the scheme is in writing.

(4) The Governor in Council may, by Order published in the Government Gazette,
declare that this section does not apply or did not at a particular time apply
to the whole or any part of a scheme for the supply of goods, services or
financial benefit.