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MONEY FOR NOTHING?

Fancy making £24,000? All you have to do is part with £3,000, cross your fingers and wait for the outcome. But you may lose everything in the process.

Despite a wealth of bad publicity, pyramid selling is very much alive and kicking in the UK. The Midlands is no exception.

In its simplest form, pyramid selling is like chain mail. A letter is received which has to be passed on to five others, who each pass it on to five others and so on.

But in pyramid selling, rather than plain old paper, it’s hard cash that’s being passed on.

Losing Out

Returns are promised from anything up to £24,000. The longer you stay in the scheme, the more money you receive.

The scheme however is dependant on new participants continually joining and eventually the pool of investors dries up. Someone always loses out.

Jane Dodge ties her hand at gambling

In the charity office BADG (Black and Asian Disability Group), Walsall, lose out they did! The charity set up to support disabled black and Asian people became embroiled in the infamous Women Empowering Women scheme.

Promised their money back eight times over, the women of BADG parted with hard-earned savings, only to lose everything, including their friendship.

"I used to love going to BADG. In the end I not only lost money, I lost friendship." said one victim of pyramid selling.

Empty cash points

In this instance, pyramid sellers targeted the very people they were supposed to be helping, but Women Empowering Women’s attraction did not end there.

Desperate to join the scheme

It has been reported that in Barnt Green, people were so desperate to join, they emptied the cash point. Whilst nurses were reported to have approached their patients in order to gain essential new investors.

Despite such warnings, people continue to invest in similar schemes, spurred on by that ‘friend of a friend, who tripled their money!’

Alison Smith is just that friend. A member of the Diamond Club, Alison made three thousand pounds. Her knack? Think of it as a game.

Get rich quick

Tucked away in an old factory, the Diamond Club has over 3,000 members, of which only a handful have made 24,000 pounds.

One of those winners is owner John Matthews who insists, "This is not a get rich quick scheme."

The Diamond Club - It's only a game!

Many of its members are thousands of pounds out of pocket, but like that final bet on the horses or last spin of the roulette wheel, this time they will clear their debts!

The government has been looking to ban schemes like this, but as yet no action has been taken.

Pot of money

As Bob Charnley, Trading and Standards Officer for Sandwell, points out, "The pyramid is simply a pot of money." With three thousand people all investing £100, but promised £24,000, it doesn’t take a mathematician to realise these figures do not add up.

Pyramid selling is simply another form of gambling. Very few people can make money for nothing.

So if the thought of placing £3,000 on ‘Rambling Rose’ in the 3.40pm at Cheltenham brings you out in a cold sweat, then Pyramid Selling ought to do exactly the same!