Posted by robert bowen on May 01, 19102 at 05:23:03:
In response to the posting on host4income - here is some additional information.
I have been following the scheme since January 2002. During this time the UK office of fair trading have commenced an investigation of the scheme. The person in charge of the investigation is:
OFT:
Ms Sarah Mills
Case Officer for host4income investigation
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
LONDON
EC4Y 8J
+44 (0)20 7211 8000 (switchboard)
her email address is:
sarah.mills@oft.gsi.gov.uk
(also a Mr David Philpot at the OFT is separately handling some information specific to investigations into Mr Simon Stepsys)
In the section below I have included some information about why the host4income scheme is illegal in the UK, followed by a list of known pseudonyms used by Mr Steve Gilruth. He uses these for various purposes including posting to newsgroups.
If you are considering paying money to this scheme I strongly suggest you telephone the Office of Fair Trading first to learn about the true nature of the scheme and its perpetrators.
ROBERT BOWEN
robertbowen_emc@NOSPAMyahoo.com
(remove NOSPAM to email me)
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LEGAL INFORMATION:
To be brief, the law creates a distinction between 'MLM' schemes and pyramid selling schemes. A clear description of the difference can be found at
http://www.crimes-of-persuasion.com/Crimes/Delivered/pyramids.htm
note the section which reads:
"For each person you bring into such a company, you receive, or are promised, future monetary rewards or bonuses based on the number of people below you (commonly referred to as a "downline") which ( and this is the key factor in pyramid schemes ) are unrelated to the sale of the product to consumers. The real profit is earned, not by the sale of the product, but by the sale of new distributorships."
The critical differentiator is that: in a pyramid scheme it is POSSIBLE to make a profit on the original sum paid to the scheme by recruiting others, WITHOUT selling ANY product. Host4income falls under this definition and is therefore illegal under the Pyramid Selling Act 1973.
This feature differentiates the scheme from MLM schemes such as herbalife, kleeneze etc, where it is only possible to profit from the sales of your downline: there is no method of making a profit by simply recruiting others.
I appreciate that this point of law may even be lost on the perpetrators of many pyramid schemes.
I have spoken to 2 citizens advice bureaux solicitors, and my own companies' solicitor (who is a contract law specialist) all of whom have confirmed that this scheme is a standard pyramid scheme under UK law.
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British Code of Advertising Practice.
Advertising Standards Authority BCAP regulations broken by scheme:
23.3 - newspaper adverts are for a pyramid scheme carried out from home but do not contain the name or address of the advertiser(s)
BCAP - specific section detailing requirements for homeworking/business opportunity schemes:
52.6 - The information states 'this is for players only who genuinely want to earn a good income, so we can't give refunds sorry' - breaches section 52.6 a, b and d
54.4a - Also - the advertiser(s) are advertising a pyramid homework scheme which does not include the full name and address of the advertiser
54.4d - The scheme gives likely levels of earnings; variously quoted as £9530 per month, £3410 per week, £30000 per year, £9770 per 3 months, £6000+ per month, £1000 to £12000+, £72000 per 9 months, £12000 per 4 months, £3600 per week, £1000 per week, £11700 per month, £500 per day, £21250 per 8 weeks, £7500 per week, £390000 per year, £2000 per week. BCAP states that quoted earnings must be attainable for normal respondents to the advertisement.
54.4i - The adverts do not include information stating that further adverts must be placed in paid for media in order to recruit further affiliates at £195.00 per recruit to obtain commissions of £100 per new recruit. This must be quoted as per the BCAP.
54.5b Newspaper adverts do not include any description of the work involved. This must be quoted as per the BCAP.
54.5c The quoted likely levels of earnings take advantage of people's inexperience and gullibility.
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Legal Information:
Pyramid Selling Act 1973
Pyramid Selling Schemes Regulations 1989 - SI 2195
Pyramid Selling Schemes (Amendment) Regulations 1990 - SI 150
The scheme was identified in the latest LACOTS sweep on internet pyramid scams
http://www.oft.gov.uk/html/rsearch/press-no/pn16-00.htm
The scheme does not include the various statutory warnings required by law on the site or in adverts.
Advertisements about a scheme must conform to the general advertising code of practice and must also show the name and address of the promoter (in this case Mr Steve Gilruth), the product or services covered by the scheme, and a statutory warning stating:
"It is illegal for a promoter or participant in a trading scheme to persuade anyone to make a payment by promising benefits from getting other people to join a trading scheme. Do not be misled by claims that high earnings can be easily achieved ".
In addition, new members of the scheme are not advised that they break the law if they do not include such statutory warnings in their adverts.
No contract is physically signed upon commencing the host4income opportunity.
A promoter must give participants a written contract setting out their rights and obligations. This contract is only binding when signed by the participant and the promoter must not accept money before it is signed. The contract must include:
* The name and address of the promoter in the UK
* A description of the products covered by the scheme
* A description of the participant's role
* Participants' rights on cancelling or terminating the contract, rights on returning goods and how to do this, including an address
* Any payment they will need to make in the first year
* 60 days warning of any change in future payments
* Participants' rights if the promoter seeks to recover commission
http://www.bcentral.co.uk/admin/consumer/directsellingfaq/What_Rules_Regulate_Trading_Schemes_Such_As_Pyramid_Selling.asp
Finally:
Since the Office of Fair Trading started the investigation into host4income, Mr Gilruth, has changed his terms and conditions in order to remove some of the terms which broke the various Pyramid Selling Acts (he now offers a '14 day money back guarantee' etc). However, I have received emails from people who have paid money to the scheme since the terms and conditions were changed, and they have been unable to claim the money they have paid back within this time.
KNOWN PSEUDONYMS OF MR STEVE GILRUTH:
SD707 standard@sendwizard.net STEPHEN DEIGHAN
OO707 standard@sendwizard.net Olu Oke
NT707 standard@sendwizard.net NICKOLAS TONI
MS707 standard@sendwizard.net Mrs Mary Sheridan
MN707 standard@sendwizard.net MIKE NODEN
JS707 standard@sendwizard.net JOHN SAUNDERS
JP707 standard@sendwizard.net Jeff Pearce
TG999 standard@sendwizard.net Tony Gioserano
RM999 standard@sendwizard.net R.Moore
PW999 standard@sendwizard.net Paul Wood
MS999 standard@sendwizard.net Michael Soliatis
MD999 standard@sendwizard.net Malcolm Dews
KR999 standard@sendwizard.net Kulbinder Rai
JW999 standard@sendwizard.net John Wilford
JH999 standard@sendwizard.net Jacqui Harris
JD999 standard@sendwizard.net Julie Edmonds
JC999 standard@sendwizard.net Jason Curzon
HD999 standard@sendwizard.net Harold Alan Dudley
GW999 standard@sendwizard.net Gary Warner
DM999 standard@sendwizard.net D McQuillen
CN999 standard@sendwizard.net JohannesNeethling
BR999 standard@sendwizard.net Jon Rice
MK888 standard@sendwizard.net Martin Kirk
JA888 standard@sendwizard.net John A McLean
WW777 standard@sendwizard.net oonagh mccormack
TD777 standard@sendwizard.net Tim Dickens
RJ777 standard@sendwizard.net Robert John Sidoli
RC777 standard@sendwizard.net Robert Collins
PP777 standard@sendwizard.net Pam Paradise
PL777 standard@sendwizard.net Peter Louer
PB777 standard@sendwizard.net Pete Belli
NG777 standard@sendwizard.net Nick Goad
MT777 standard@sendwizard.net michael
MP777 standard@sendwizard.net Malcolm Pearson
JC777 standard@sendwizard.net John Chalmers
HK777 standard@sendwizard.net HASSAN KHASHIAN
HB777 standard@sendwizard.net HUW BAYNHAM
ES777 standard@sendwizard.net Eric Shale
DM777 standard@sendwizard.net derek mould
DJ777 standard@sendwizard.net DAVID JOINES
DC777 standard@sendwizard.net DAVID CURRIE
CB777 standard@sendwizard.net Colin Bangay
BR777 standard@sendwizard.net Brigit Reynolds
AH777 standard@sendwizard.net Andrew Hall
PH666 standard@sendwizard.net Patricia Hubbell
MF666 standard@sendwizard.net Maclean Fraser
JW666 standard@sendwizard.net John Wootton
GB666 standard@sendwizard.net gary butler
EA666 standard@sendwizard.net Elham Alibabaie
DD666 standard@sendwizard.net darren dunkley
CJ666 standard@sendwizard.net Colette Jenkins
CB666 standard@sendwizard.net CAROLE
BC666 standard@sendwizard.net Arran Ennis
SG555 standard@sendwizard.net Steve Gardiner
PB555 standard@sendwizard.net PETER BALL
JP555 standard@sendwizard.net Mr James Pullen
TC444 standard@sendwizard.net Terry Coxon
JH444 standard@sendwizard.net J Harvey
DM444 standard@sendwizard.net david morris
DB444 standard@sendwizard.net David Bruty
SG333 standard@sendwizard.net Sarah grange
SG333 standard@sendwizard.net Sarah grange
SE333 standard@sendwizard.net Streffon Eastham
SB333 standard@sendwizard.net simon n. brace
RR333 standard@sendwizard.net Ronnie
PP333 standard@sendwizard.net Paul Pimblett
MB333 standard@sendwizard.net Mike Badnall
GT333 standard@sendwizard.net graham tye
DL333 standard@sendwizard.net dragon leisure
BS333 standard@sendwizard.net Brian Salmon
AI333 standard@sendwizard.net Alessandro Iaconi
amd his latest fake name... (!)
TN101 standard@sendwizard.net Tim Norman
robert bowen host4income investigation - updated 01 05 2002