Feeds

Compensation for pyramid scheme victims

Get Rich (not quick)!

  • alert
  • submit to reddit

New hybrid storage solutions

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

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.