HC Deb 05 March 1973 vol 852 cc11-3
11. Mr. Raphael Tuck

asked the Secretary of State for Trade and Industry what plans he has to introduce legislation to control multi-level marketing and pyramid selling.

Sir G. Howe

I intend shortly to make public, and invite comment on, the Government's proposals for dealing with pyramid selling.

Mr. Tuck

I am grateful for that news. I should like to ask the Minister two questions. First, when does he expect the results of his Department's investigations into pyramid selling to be published? Secondly, as he must be aware that people are daily being swindled out of thousands of pounds, would he make haste to end this abominable practice either by allowing my Bill, now before the House of Commons, to proceed or by bringing in one of his own, the important thing being to stop the rot from spreading?

Sir G. Howe

I hope that our proposals will be available shortly. I appreciate the hon. Gentleman's concern as expressed in his Bill, but it deals with only multi-level marketing and the problem can arise where there is marketing at a single level. I share his concern that pyramid selling should be regulated. Meantime, I endorse his warning that anyone considering joining a pyramid selling scheme would be well advised to think carefully and even to take professional advice before doing so.

Mr. Rost

Will my right hon. and learned Friend seek some way in which those who have already been swindled may seek redress? It is extremely difficult for this to be done through the normal processes of the law. One of my constituents has just lost £3,000 through a pyramid selling swindle.

Sir G. Howe

I appreciate the difficulty of making use of the existing processes of the law, and that is why we are considering changes. But it is difficult to give any kind of assurance that those who seek redress will be able to get it from companies and organisations that are no longer in business. That underlines the importance of people not being gulled into parting with large sums of money for what may be worthless rights.

Mr. Arthur Davidson

As most of these firms also indulge in the second mortgage racket, does not the Minister have any plans for making it compulsory in all instances of the advertising of loans for the true rate of interest to be shown? May I draw his attention to an article in the Sunday Mirror in which it is said that of 66 companies advertising loans not one shows the true rate of interest on a yearly basis?

Sir G. Howe

I share the hon. Gentleman's concern that we should have as soon as possible effective truth in lending laws. That is one of the matters now under consideration in the legislation that we have in mind following the proposals of the Crowther Commission. A later Question deals specifically with second mortgages.