§ Mr. Alex CarlileTo ask the President of the Board of Trade what plans he has to introduce legislation(a) to make it a requirement that the promoter of a pyramid 340W scheme is clearly stated in any advertisement for the scheme and (b) to ensure that estimates of earnings from legal pyramid schemes are verified independently; and if he will make a statement.
§ Mr. Leigh[holding answer 8 July 1992]: The Pyramid Selling Schemes Regulations 1989 already ensure that potential participants are given full information about a scheme before they make any commitment. The required information includes the name and address of the promoter.
The regulations also require a promoter to have evidence if he refers to a specified financial benefit or a financial benefit being greater than or not less than a specified sum. It would be for the courts to decide whether the evidence was acceptable.
I have no plans for further legislation.
§ Mr. Alex CarlileTo ask the President of the Board of Trade what regulations exist whereby participants in companies licensed as legal pyramid selling schemes have their incomes restricted by the number of people recruited; and if he will make a statement.
§ Mr. Leigh[holding answer 8 July 1992]: No such regulations exist. Pyramid selling and similar trading schemes are not licensed.
§ Mr. Alex CarlileTo ask the President of the Board of Trade (1) what are the criteria whereby firms are licensed under the term "legal pyramid selling scheme"; and if he will make a statement;
(2) what is the number of companies in the United Kingdom licensed under the term "legal pyramid selling schemes"; and if he will make a statement.
§ Mr. Leigh[holding answer 8 July 1992]: There are no licensing arrangements for pyramid selling or similar trading schemes.
§ Mr. Alex CarlileTo ask the President of the Board of Trade what plans he has to introduce legislation that would require promoters of legal pyramid selling schemes not to take payment from participants in such a scheme unless they hold an appropriate insurance policy indemnifying them against the possibility that members or participants in the scheme choose to exercise their rights of resignation or refund; and if he will make a statement.
§ Ms. Joan WalleyTo ask the President of the Board of Trade what assessment he has made of companies failing to comply with current legislation relating to pyramid selling regulations under the Fair Trading Act 1973.
§ Mr. LeighEach case receives individual consideration. There have, as yet, been no prosecutions under the Pyramid Selling Schemes Regulations (1989), but in view of public concern the effectiveness and appropriateness of the regulations are kept under review.