Feeds

Compensation for pyramid scheme victims

Get Rich (not quick)!

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

Over 25,000 UK victims of an illegal international pyramid scheme could receive compensation from a $20m US redress scheme, set up to compensate victims of a fraudulent firm called Skybiz.

Oklahoma-based Skybiz operated between 1998 and 2001, ostensibly selling a work-at-home business scheme in which consumers were asked to buy an ecommerce web pack for $125.

Consumers were misled into believing that they could get rich quick if they recruited new associates into the programme. As a result, members were recruited to the scheme in the US, the UK, Ireland, Australia, South Africa, New Zealand and Canada.

In June 2001, the US Federal Trade Commission banned the company from operating what it described as a classic pyramid scheme – a scheme in which investors are misled about the likely returns, as there are not enough people to support the scheme indefinitely and only the people who set up the scheme are able to make money.

The FTC and the promoters of the Skybiz scheme settled the case in 2003, and part of the settlement agreement included the setting up of a compensation scheme for victims, with a fund totalling $20m.

However, according to the FTC, it is likely that claims on the scheme will total $140m, with the result that individual cash payments – which will be made to victims pro rata – will be small.

UK consumers who think that they may have fallen victim to the scheme should make a claim through the Skybiz redress site.

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Related stories

UK.gov computer training scam gang jailed
Directors disqualified for £3m internet scam
Teen eBay fraudster sentenced to 12 months
UK court jails dealers who sold cannabis online
Web scammers sell Indian PM's house to American

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.