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<<WORLD SCENARIO
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Pyramid schemes are global phenomena, the US, the largest of all market economies
is where the original Ponzi scheme occurred and the term was coined. Additionally the USA is where Multilevel Marketing
was born and is the head quarters of the largest numbers and biggest of such
schemes (Robert L Fitzpatrick). So it
will be very useful to look at a legal regime governing such schemes in USA and other
countries in the world.
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Canada:-
Canada’s Federal Competition Act
regulates Multilevel Marketing Plans.
In Sec.55 and defines a subset of them as Schemes of pyramid selling
in Sec.55.1. Canada’s
Federal Criminal Court also contains provisions prohibiting the Pyramid
schemes.
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China:-
Since 1998
the Chinese State Council office and State Industry and Commerce
Administration, Public Security Ministry and other department had issued over
10 individual or co-sponsored regulations successively to attack Network
marketing; Multilevel Marketing is a banned activity in this country.
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Singapore:-
Multilevel Marketing and Pyramid Selling (Prohibition) Act 1973. It was amended in 2000 by Multilevel
Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order 2000.
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SRILANKA:-
Sri Lanka enacted Anti-Pyramid Act
in 2005.
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UNITED
STATES OF AMERICA:-
The Federal
Trace Commission under the broad category of unfair or deceptive acts or
practices in or affecting commerce prosecutes pyramid schemes and Multilevel
Marketing schemes.
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These are very few examples. Many countries banned MLM
activities.
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