Cyprus Mail

Don’t be duped by pyramid schemes, warns consumer watchdog

By Constantinos Psillides

THE Competition and Consumer Protection Service (CCPS) of the Ministry of Energy, Commerce Industry and Tourism issued a warning yesterday, urging people to be very careful when dealing with pyramid schemes.

The warning mentioned scams related to the referral-based sale of coffee, juice and water, as well as holiday reward schemes. The CCPS warned people to stay away from such pyramid schemes, saying that any venture that promises lucrative benefits in exchange for drawing in new clients is illegal.

The CCPS also announced that it is currently investigating possible law violations when it comes to certain pyramid schemes currently in play.

“The object of our investigation is the creation, operation or promotion of a sales pyramid scheme, where the consumer is under the impression that he will greatly benefit by drawing in other consumers into the scheme,” the CCSP said.

By CCSP standards, a sales pyramid scheme is any system of sales by which the consumer enrols friends and associates for financial gain. In a pyramid scheme, according to the CCPS, the consumer allegedly stands to benefit based on how many new people he registers to the programme.

The CCSP noted that in various public gatherings to promote this business practice, organisers employ a number a tactics to affect people.

“They create a climate of enthusiasm, by presenting various facts that tend to create the expectation that a person would greatly benefit by registering himself and others, without taking into consideration the possible risks involved,” the CCSP said.

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