Michael Ahern (Cork East, Fianna Fail)

I am aware of reports of schemes operating in the Cork area whereby people are apparently prepared to hand over amounts of money in the expectation of receiving multiples of that amount in return. The Pyramid Selling Act 1980 prohibits people from inducing other people to participate in pyramid schemes. As the Act only applies to goods and services, there is a legal doubt as to whether the type of transaction in question is covered by the Act.

The Garda Siochána, the enforcing authority for the Act, is investigating some schemes in the Cork area under the Pyramid Selling Act 1980. I do not want, therefore, to interfere with their investigations. Ultimately it is for the courts to determine whether legislation applies in any particular case.

The Minister for Enterprise, Trade and Employment has instructed departmental officials to contact the Garda Deputy Commissioner responsible for the Garda Bureau of Fraud Investigation seeking the views of the Garda Siochána on any difficulties being experienced under current legislation. The official will also ask whether the Garda Siochána has any suggestions as to how the legislation might be improved, based on its experience dealing with the sort of practices employed by the people who devise and promote such schemes.

In the meanwhile work continues in the Department of Enterprise, Trade and Employment on the transposition of the Unfair Commercial Practices Directive 2005/29/EC. The directive aims to protect the consumer by, inter alia, banning certain practices. One practice is described as:

. . .establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.

Although the directive is due to be transposed by June 2007, the Minister for Enterprise, Trade and Employment hopes to have the legislation ready this year.

People should be vigilant in how they use their money. People should reflect on whether it is realistic to expect other people to give them large sums of money for nothing.

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