Feeds

Compensation for pyramid scheme victims

Get Rich (not quick)!

  • alert
  • submit to reddit

Boost IT visibility and business value

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

The Essential Guide to IT Transformation

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
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
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
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
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.
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.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.