Schemes, Scams, Frauds.

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Braveheart to Heart

Darren Giudici from Scotland seeks advice on Women Empowering Women June 13, 2001

Dear Les,

Firstly, I must compliment your extensive work on the web-site. This is just a short message in hope of some advice.

This WEW craze is booming in the city of Glasgow, Scotland at the moment.

My problem lies in the fact that my closest relatives (mother, father & sister), have been influenced to take part in it.  I know it is their decision at the end of the day, and have not been coerced into doing so, (but the subtle promotion & persuasion of the WEW benefits, I feel is a very powerful sales tool).

I viewed it with the caution it deserves and thankfully sourced your site.  Now, having been somewhat enlightened into the theory, principles, danger, legality & basic concept of the operation, I feel obliged to do my best to stop my family’s venture into it.

I have presented some information from the site to my parents, but they seem too caught up in the short-term gain aspect to consider anything else.  My main concern is that, they are taking quite an active part in the introduction of new recruits.

I still haven’t been able to ascertain whether this operation is legal or not in the UK??

I have read of cases in the States of people being charged, fined & had to pay legal fees, & don’t wish to see my parents losing friends or a home through this.

After having read Julia’s letter regarding the Isle of Wight case & the local media intervention, my immediate thought was to contact the local newspapers to investigate and highlight the operation to the public.

Any advice you could offer for my concerns would be greatly appreciated.

Thanking you in anticipation,

Darren

Hi Darren,

Thanks for the kind words.

One lady from the U.K. ran into the same problem of trying to convince the believers and found the same brick wall.  All you can and should do if give the info on paper and stand back.  The more you try to help the more you alienate them and put their backs up.

I suppose getting people out of cults is similar but don't abduct your own parents!  Perhaps ask them what would happen if they asked for their money back.

As for the law, I can't honestly say because the police in the U.K. haven't got back to me with a definite answer.  This is not uncommon and even in North America asking the police to render a legal opinion on a strange "gifting group" will draw blank stares.

That's why I am trying to get the true word out where and when I can.

Best of luck.  It won't turn out well though, I'm afraid.

Les

After an expose of Heart: Women Empowering Women ran in the Evening Times of Glasgow, Scotland hundreds of calls poured into the paper.

Even after it sparked financial panic on the Isle of Wight, it has been spiraling across the west of Scotland and despite all the warnings that the scheme will run out of new members and collapse, thousands of pounds were still changing hands at meetings the night of the article in Springburn and Royston, Airdrie, Coatbridge, and the Renfrewshire village of Kilbarchan.

Women there were asked to pay in £500 each in return for a windfall of around £4000 - if they can find another seven recruits.

One woman in Roystonhill was reportedly ejected from the venture after making £80,000 and becoming too greedy but the craze appeared to be widespread with reports it had gripped staff in major city centre department stores. A Women's Aid official said: "It should be renamed Women Exploiting Women."

As reporters tried to find the people responsible for bringing the multi-million pound scam to Scotland, they discovered a veil of secrecy has been drawn over it but the Trading Standards Officers vowed to look further into the scam.

The Plane has Crashed into the Mountain!!!!!!!!!

Thanks for your prompt reply Les. The bubble has been burst as we speak. The Evening Times is the most prominent and powerful newspaper in Glasgow, and I'm glad they've exposed this immoral trend.

I appreciate your sound advice and honest opinion, and currently await to see the repercussions my family suffer with the pyramids inevitable collapse. All I can do now is hope they learn a valuable lesson from this, (& perhaps, listen when I speak!).

On a lighter note, I will definitely be purchasing a copy of your book on payday towards the end of the month, as I find the subject & extent of these scams, in society, fascinating. I'm also submitting your web-site to the Evening Times, to let the public be aware of what to look out for in the future, and if you sell a couple more books.... more power to your elbow!!!

Good luck in making your moral $millions$, & if you never get there, take solace in the fact - YOU  WILL GET TO HEAVEN!!!

Cheers for now,

Darren

Mark Mitchell sends his comments along from Scotland Oct 18/01.

1st class site!  Will be buying the book!

The Women-Empowering-Women (or people-empowering-people, they've had to rename it because they ran out of women!) has been raging for a while now in Aberdeen, Scotland.

I have yet to meet anyone who has made any money out of this; unfortunately I am still waiting for the apologies from all the people who got p****d off with me when I tried to explain the scam.

I thought the best one was a female at work with £3500 in this thing. After I had tried to explain her folly she had the following conversation with a colleague.

"It's people like Mark who cause these things to crash."
"But Susan all the newspapers have been full of stories about how it's got to fail."
"All that stuff in the papers was lies."
"How do you work that out?"
"They told us at one of the meetings."

At this point the rest of the office burst out laughing!

Best regards, Mark.

Gaelic Gall

This scheme has literally exploded over the last few weeks in our little village (Burry Port) in South Wales. I was asked to join initially over three weeks ago but didn't attend a meeting until Saturday gone. I was amazed by what I saw!

I had previously viewed this website and printed off all I could find relevant to this scheme. (although they are called "Gift Hearts" here)

I went to the meeting with my sceptic nelly head on and then found that when I tried to inform others there I was accused of being a kill-joy and of having no faith in my fellow women. (friends & family included)

Our local town newspaper (The Llanelli Star) has reported information concerning the running of the scheme but this only appears to have fuelled the fire.

At the meeting I witnessed almost 180 women arriving clutching envelopes of amounts ranging from the minimum £250 and upwards to the maximum £3000!!!

I am concerned to say that I have put the minimum into the scheme. (common sense kind of goes out of the window when you watch the "receiver" spread £2400 over her carpet to count it!!!)

Do you know how long the longest one of these has been sustained for?  And also is there any way of helping to prolong the turnover?

Please help! I know people who are borrowing large sums to go into this and I want to help give people more information to enable them to see the pitfalls!!!

Many thanks

Pat  ( June 25, 2001 )

Please find attached a couple of national news stories we have generated from our investigations into Women Empowering Women. The BBC are on the Isle of Wight filming an item for a consumer show at the weekend while another documentary unit is also sniffing around.

The whole scheme appears to be falling flat now and its dawned on people they aren't going to get their money back. Of course they are all blaming our 'negative coverage' as opposed to their own stupidity and greed. No doubt you've seen it all before though!

Cheers for now and thanks again for your help and interest. Keep me posted.

Gavin

Article One        Article Two

The Gift of GaB (U.K.)

12 Apr 2001

Dear Les

Thanks for getting back to me - the info you sent looks great and most of the things that you mentioned actually happened at the meeting - I thought I'd write a little about what actually took place as it might be of some help to you and to anyone who wonders what happens at these things.  I have been left that angry and frustrated by the whole thing that I also need to get it off my chest.

It was an informal meeting with five people who'd already joined the scheme and four potential mugs (3 plus me).  Alcohol was offered and then the five people - all friends or acquaintances started going on about how wonderful the scheme was.  (The room was laid out very much in a confrontational way - the five people who'd joined the scheme sat opposite the four of us).

There was a good friend there who hadn't mentioned the scheme to me - probably because she knew I'd be cynical - but if it was such a great scheme why didn't she want to share her good fortune with all of her friends?  My main focus for going to the meeting in the first place had been to stop her parting with any money - too late - she had already parted with her cash.

One lady claimed that she had already received her money but that it had all gone to pay off debts so she couldn't prove it.  As these five people were all participants, as opposed to organizers, they had little answer to any questions and said that all questions would be answered when a friend who had been through the cycle 4 times arrived.  They just kept repeating the same mantra - women empowering women, trust, freedom, sharing, etc.

A rumpled envelope was produced which was supposedly what one pile of £3000 had arrived in. No cash/bank statements were produced at any time during the evening although we were told that the mystery lady due to arrive was bringing her latest pile of cash with her.  I didn't see any cash at all in the evening - not that seeing cash would have proved anything but the sight of a pile of crisp bank notes can do strange things to people!

One thing I will say is that you knew that at the back of their minds the people who had joined the scheme knew what was happening but were refusing to accept it.  It was possible to sense the desperation in them - if they didn't get other people to part with money they weren't going to get theirs back.  There was also a self-denial going on that if they were lucky enough to get any money back it was only because someone further down the pyramid would be ripped off - they're mostly nice people and didn't want to think about stuff like that.

So the lady arrived - I'll call her Jane -  looking like someone who was trying to look rich  (the middle classes in England are very snobbish and we can spot outsiders a mile away!)  Jane then said she'd only been through the cycle once - stories were starting to fall apart very quickly.  A little later it transpired that only one of the group of women knew Jane and had only known her for 6 weeks - not exactly the great friend she had been portrayed as!

She also attempted to portray herself as a business woman and then contradicted herself by telling us what a poor return she got on some money that she had invested with a bank.  (And she wants us to trust her with money!)  She told us that we were all women together and we all had some problems in our life that we would love to solve by having more cash.

There was an awful lot of talk about women helping women, empowerment, friendship - all the stuff you've mentioned in your article.  And trust was mentioned over and over again.  They all kept saying how hard it had been to hand over the cash but what a wonderful feeling they got each time they moved up to the "next level".

One of the people I'd gone with asked Jane if the scheme was so great would she lend her the money - Jane offered to lend her £1,500 if she would stump up the other £1,500.  So we said okay - but only if the £1,500 loan doesn't need to be paid back if she doesn't get her money back - you can guess how that one went down.  "That would be against the whole point of the scheme which is about women empowering women, trust, women helping other women, freedom, friendship etc. etc."

There was a lot of photocopied garbage about the scheme but not enough copies for anyone not in the scheme to take one away with them.

We were told three points:

1. If we joined the scheme we would have to support other people in the scheme.  How?  By bringing in other people.

2. To receive we must also give - some of the promised cash should be used to support other women.

3. This was an oral tradition of women empowering women - cash only!

We were also told that it was best not to draw attention to the scheme by depositing the money in a bank.  I was also advised against discussing it with my solicitor or accountant as they would try to discourage me from joining.  I did point out that my accountant would love me to have more money to play with as he would gain from it so why would he not encourage me?  They're answer - because he's a man!

So "suckered in" by the thought of easy riches I said "okay - I'll take 24 hearts" and earn myself £1 million plus!  I was asked that if I did this would I be able to bring enough people into the scheme.  Sure - if I thought it was a good enough opportunity!  Boy - did I get slapped down for that.  I was told that was not in the spirit of the gifting club and that I was being greedy!   It wasn't to do with making money (?!) it was to do with women empowering women and sisterhood, trust, well being, freedom, etc. etc. etc. (Are you getting the picture yet?)

There was also a form that would need to be signed saying that the £3000 was a gift and therefore not liable to tax.  There was a photocopy of a letter - again I was not allowed to take a copy - from Deloitte & Touche saying that in their opinion the gift was not liable to tax - at least that's what it said until I got to the last paragraph - when it said that the tax liability was open to legal interpretation and if it was taxable the receiver would be liable to pay tax at the rate of their taxable band.

I did point out what bullshit Jane was talking (politely of course) and that the gift was given in expectation of consideration so was legally not a gift.  Jane insisted it was a gift and therefore not taxable.

The desperation was very upsetting to see - I can see that at a larger meeting it would be very difficult for anyone to stand up and point stuff out.  Those who have already "gifted" (I was slapped down for using the word "paid") know that they are not going to get their money unless others join and sit there in some little dream world imaging how they're going to spend the money.  We were also given examples of how one woman (friend of a friend of a friend) had bought a £400 designer dress - a lot of money but we're not exactly talking about mega rich here and how someone else had spent £1000 in one go at an expensive dress shop.  I resisted the urge to point out that if she hadn't joined the scheme she could have spent £3000!

One of my friends asked how long it would take to get the return on the "gift".  The answer was between 2 weeks or 10 years depending on how fast the scheme moved.  (I have to say I was impressed by the genius of the 10 years! - what better way to stop people asking questions too quickly!)

I also asked who the other people were in the pyramid and how I would know they were real people - the answer was that once I joined the scheme I would be given their names and telephone number so I would know they existed!  Discussions were held on a Sunday on a conference line - which was legal because it was a British Telecom line!  (So non-British Telecom conference lines are illegal? - that was news to me!).  We were also told that it would be difficult to get through to these lines as they can only accommodate 20 callers at once.

Jane also said that an accountant had worked out that if everyone in the Isle of Wight (just in case anyone had read the papers) joined the scheme it would take 6 years for everyone in that area to join - and imagine how much bigger the whole of England is?  A quick sum and I had it figured to 18 weeks for the entire population of the UK (including children!) and only 22 weeks for the rest of the world (8 people joining each branch every 2 weeks).  Jane did try and blur the figures by saying that everyone only needed to bring in 2 people for the scheme to work and for someone to move up to the next level (I always wondered why they used levels in pyramid schemes) not pointing out that one person receives 8 payments - therefore for each person to get the promised return 8 people need to join.

I was fortunate in that Jane had not rehearsed the script enough and that it was possible to pick holes all over the place - but I felt like an absolute shit for doing this because my friends, the people sat opposite had already parted with their cash.  It was people like me that caused people to lose money in pyramid schemes!  I think against a more practiced con artist I would have had difficulty making my points.  (One of my friends pointed out after that if I had taken the information I'd pulled off the Internet in with me I'd probably have been lynched!)

Unfortunately it was too late for the people who had already joined. To see the thoughts forming in their heads that they might be participating in an illegal pyramid scheme and ripping off other people was upsetting.   (However, the human mind is a wonderful thing and such thoughts were rapidly squashed and they retreated into cloud cuckoo land once again.)

And when my questions became too difficult I got the ultimate put-down "You're thinking like a man"!  (I wonder if the male version of these schemes uses the put-down "You're thinking like a woman"?)

I was also told that I would understand it more once I had gone to a few more meetings.  As if I didn't already understand it!

I found the most difficult thing was keeping my temper - I had gone to the meeting to try and stop people being suckered in.  I hope that the research I'd done on the Internet will stop the people that came to the meeting with me being suckered in.  The worst thing about the whole thing is that it divides friends - rather than empowering them.  If my friends who have parted with money don't get their promised return it will be my fault for stopping people joining the scheme, or if they realize they have been suckered, they will be too embarrassed to talk to me.  Some support group, huh?  And anyone who didn't join the scheme because of me will be left wondering for a while - at least until the whole sorry pyramid falls apart.

So what did I get out of the evening?  I hope I've managed to persuade the people who came with me not to part with their cash - although ultimately it is up to them.  I left them with a pile of stuff I got off the Internet (including some of your stuff) - thereby giving them what I consider to be the most empowering thing in the world - information.

The thing that I found hardest to believe was that these normally sensible people had been taken in.  If they were investing £3000 in an investment account or company wouldn't they do a bit of research first?  Even if recommended by a friend?  But here they were willing to hand over cash to a complete stranger?   There were a lot of similarities between the language of the group and the language of religious cults.

To be completely honest I wish I hadn't gone to the meeting.  I am sure that Jane will report back and answers will be prepared to questions that I raised.  It was also distressing and frustrating and will lead to strained friendships.  So all in all a rum deal for everyone concerned (except those taking the money!) 

But anyway, thank you for your website - it helps to have stuff to present to people.  Some of the other scams and rip-offs you list make for interesting reading. I guess with all the negative stuff in the US the con-artists are turning to the UK for fresh suckers!  Anyway - thanks for the help and keep up the good work.

I feel so much better now I've got that off my chest.

Julia,

You did a wonderful job of writing about your experience. The best writing comes from the heart and is fast-paced story-telling. You likely have some idea of the frustration I feel in trying to promote my book and site to people who don't ever believe they are that gullible as to be taken in.

A scam technique that follows a similar vein is the Affinity Fraud concept.

 Les

Hi Les

Death threats huh? I thought it was all about women helping women

One other thing I would add is that if people are visiting your site in order to attend a meeting armed with information I would strongly discourage them.

We all want to help our friends but I think the best thing to do is point the people towards the information (hopefully before they part with any money) and let them make their own decision if they want to get ripped off or not. If they attend the meeting there is a real chance they will end up falling out with friends, frustrated, angry and with a thumping migraine to boot.

Regards

Julia

Fri, 20 Jul 2001

A new chain letter set up has now started called LUCKY 6 and what continues to amaze me is peoples' wish to throw their money away! This one requests that you send 20 to the person at the top of the list and promises that by passing the letter on to a further 3 people who then pass it on again, and so on, when you reach the top of the list you are promised over £14000. Now I know it is only £20, but you would think that people would have learned their lesson. Go figure, huh!

Londoner Limits Losses

Before I knew what I was dealing with, I told my friends I might be willing to invest - I'd have to look into it though. When I told them what I'd discovered re: Baroness Alford, Isle of Wight, etc and other info from Trading Standards and your site, they were frosty to say the least.

It was bad-mouthing the scheme that ruined it, they said, and when I mentioned that the 8 people they each had to find in order for them to receive their £24,000 were highly unlikely to ever receive a penny, they dismissed me.

I don't know if they're in on it early enough to see a return - if they come to me and say "See, you should have listened to us", I'll at least be happy that they haven't lost out. But my conscience will not allow me to rip-off 8 people who, like my friends, are probably very nice, decent people who work hard for their money.

I hope more info keeps coming through as I have heard the scheme is moving across SE London and out towards Kent. Don't people realise that the scheme moves further afield as new recruits begin to dry up in the present area? Also, if someone was investing £3000 of course they would thoroughly research the investment before risking their money. But this, they just hand it over - no receipt or anything!!!! Incredible.

Best wishes

Paulette 06/30/01

Update: A viewer indicates that WEW is rampant in Northamptonshire as of July 2002.

Nick Knocks Nastiness

I have looked at your site a few times and I find it very informative. There are some unbelievably nasty con artists in this world and therefore it is only logical that there are nasty scams.

I have looked at women empowering women and honestly don't think it falls into the category of a nasty scam but consider it no more risky than gambling on commodities or futures.

I think the main problem is that people have either been blinded by greed or must not have had how it works explained properly or someone deliberately omitted to explain it.

I have seen so much rubbish said in the media about this it is unbelievable.

What anyone should be told right from the beginning is that you must be prepared to lose the money, whether it be £50 or £3000.

You get nothing for nothing. If everyone in the group sits on their backside just waiting for their payout they're going to get a short, sharp shock; they have just lost their money!

I cannot believe how many people have paid their money and sat waiting! These are the people that have run to the media complaining about the scheme. Calling it a scam and screaming that they have been ripped off.

What I don't know is whether they were actually told that they would have to recruit one person to join. One, not eight, I have read that everyone joining has to bring eight people in. This is not correct.

I have also read that no one knows who's in the group. Correctly run, everyone has a copy of who's in the group with their names and phone numbers; groups actually meet as well.

But then there's always the con artist out there somewhere. I heard of a women in Hereford who started a hundred pound group but this was conditional on people joining a £300 group then it was conditional on them joining the £3000 group. The con was no one had any copies of the group list. No names or phone numbers. She coldly and calculatingly ripped people off, creaming the money for her and her relatives.

Another article I read in a magazine was from a young girl who paid her money in, only to be told ten days later that it had stopped and she had lost her money. She obviously fell into the category of sitting on her backside and waiting. She did however go into another group for a hundred pounds this time to try and get some money back!

How can the same girl call it a con then do it again!!!.

The banks don't like it and go on TV and say it's a con because hundreds of thousands was being taken out of their banks, and generally not going back in. The government doesn't like it because as it stands they cannot tax the money, so are losing out on 23-40% tax as unearned income.

A lot of, for want of a better word, posh people don't like it because suddenly you have the lesser mortals having thousands of pounds to spend, and they tend to spend it.

You have statisticians coming up with all sorts of astronomic figures, what they don't show or allow for is that most people who go in, go back in, so generally it is not eight people required but seven or six.

I believe that, operated correctly, the scheme can be perpetual. There are millions of people in the UK who have the means.

Most importantly, go in with your eyes wide open. Sit back and do nothing and you have lost your money. If everyone going in brings just one person it will continue. It is purely and simply distributing wealth and this can be ongoing.

I feel sympathy for the people who were mislead into going into the scheme. I do not feel any sympathy for the greedy bunch who sat on there backsides and waited for the money, and it never came.

I feel even more sympathy for the people that have lost their money due to the bad publicity, which to my mind was only created by the sitters.

I would like to stress that I do not agree or condone any scams, and people who deliberately set out to do this should be locked up!!

For seven years I was a financial advisor, two with one of the leading high street banks. You should see what these so called respectable institutions condone and cover up. And believe you me you should also see just how devious and conniving customers can be. This WEW is a walk in the park compared to them!

It will be interesting to see whether you are open to see both sides of an argument.

Nick Jaroszweski 11 Sep 2001

Well Nick,

You make a fine argument for the proliferation of this type of thing. You are certainly right that they could potentially go on forever. The very fact that they keep springing up year after year in various forms seems to suggest that anyway.

You may only need to bring in one person but the fact remains that you require the contributions of eight people to collect anything yourself. This eight to one, or as you suggest seven, or six to one ratio holds true from the initial group to any number of participants. Even without bringing world populations to the example chart you are distributing the wealth of many (8,7,6) into the hands of one with the promise that it can be self-perpetuating.

With gambling you assume the possibility, ( with me the certainty ) that you are going to lose your money, or win at the expense of the house. Odds can be calculated and acted upon, though rarely this logical approach comes into play.

With stocks, commodities and futures the ratio is simply one to one. For every buyer there must be a seller. Every winner a loser. The profit taking can continue only as long as there are new buyers willing to pay ever greater amounts to the sellers.

At least in those markets, in some cases, the asset is backed by some tangible worth. With pyramid schemes the only backing is greed and hysteria packaged as enthusiasm, opportunity and in this case, benevolence.

Any such scheme can and does work as long as it is pushed forward by promoters to an unsuspecting and trusting audience. The crafty fully understand just who their market is though and milk it for all it's worth.

Regardless of who is to blame for the eventual demise of such a scheme, the top 5% ( initiators ) always win at the expense of those on the lower tiers.

In the long history of man, no pyramid scheme has continued to its global fruition, awaiting the introduction of a new visitor to our world. And what a welcome he would get as the only person yet to join Humans Empowering Aliens.

Even at that imagined stage only one in eight or seven of our planet's inhabitants would have been winners in the process you describe where everyone has successfully worked their hardest to ensure signing up a new recruit.

To ignore the plight of certain losses in future participants even though you yourself may benefit suggests a craftiness bordering on nastiness which I know you do not wish to possess.

I do value opposing views and realize that my perceptions may not be shared by all. Thanks for taking the time to write.

Les

Date: 21 Sep 2001

Hi Les, 

Thanks for your reply. I do think however that the interjection of aliens by you has brought the sensibility of the argument to a lower level.

I stated in my original e-mail that I did not believe it was a scam. I also stated that I believed that if everyone going into the scheme did so with their eyes wide open with the knowledge that they could lose their money then no fraud scam or swindle could be inferred, stated or proved. Also that it could be perpetual.

I have listed below, verbatim the definitions in the New Webster's Dictionary of the English language, encyclopedic edition.

Scam: a deceptive means or instance of obtaining money, a swindle.

Swindle: to cheat and defraud grossly or with deliberate artifice, to practice deception in order to acquire illegally the assets of another, a fraudulent scheme to dupe people out of money or property.

So if people are fully informed and aware that they could lose their money, the actual scheme cannot, by definition, be classified a scam or swindle. This however does not stop inscrutable people abusing and manipulating the scheme to their own ends.

You have possibly come to the conclusion by my support of the scheme that I must be one of the 5% that have made lots of money from the scheme. If you have you are wrong!

As it stands today my wife is likely to lose £3000.00.

Believe me I don't like losing £3000.00 but she/we went in with our eyes fully open and aware that we could lose the money. She went in about a week before all the bad publicity sprang up.

We have not gone running to the press or the media shouting "Con, Scam" and we have not been robbed!  WE WENT IN WITH OUR EYES WIDE OPEN KNOWING THE RISKS.

We have not fallen out with the person that introduced her either. We also did not believe it was a scam or con but nothing more than wealth distribution, and that it could just stop if no others joined.

Regards, Nick

Non-Stop to Loserville

There has been some lively discussion on  UK Breakfast Television Forum - GMTV Pyramid Investments after a recent programme re Women Empowering Women of which there are still many advocators.

It now seems though that a new craze 'TheTrain', another pyramid scheme which turns £100 into £34050, has hit the scene. In this case they attempt to create credibility by donating money to charity.

Sue Scarrott  11/20/01

Without a Word Of A Law

The question of the legality of gifting schemes in the UK is confusing because until the DTI get enough complaints they will not say whether they are legal or not. Too many people who have lost money prefer to complain to editors rather than the DTI. It will probably take a high court judgment to set a precedent before they make up their minds.

I run a UK business opportunity magazine and have often refused ads for gifting plans on the grounds that I believe them to be illegal and unethical for the following reasons according to our laws:

	There must be a product or service deemed to be worth the asking price.
	It is illegal to promise high rewards for future introductions
	Anything other than exempt single level schemes must include the correct legal terms conditions and 2 copies of contracts with information packs.

None of those 3 legal requirements are offered with any of the gifting plans that I've seen which, in my book, makes them illegal.

Section 120 of the 1996 Trading Schemes Act which came into force in 1997 states that where: 

	anyone makes any payment to, or for the benefit of, the promoter (or if there is more than one) any of the promoters,
	or to, or for the benefit of, a participant in the trading scheme
	and is induced to make that payment by reason that the prospect is held out to him of receiving payments, or other benefits, in respect of the introduction of other persons who become participants in the trading scheme,
	any person to whom, or for whose benefit, that payment is made shall be guilty of an offence.

This act was brought into force to outlaw money games, cash circulation schemes and chain letters and also I believe makes gifting plans an offence under the UK laws.

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