Feeds

Compensation for pyramid scheme victims

Get Rich (not quick)!

  • alert
  • submit to reddit

Build a business case: developing custom apps

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
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.