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OFT takes action against misleading mailshots for 'money-making' scheme

PN 116/03     3 September 2003

The OFT has taken action against misleading mailings for a 'get-rich-quick' scheme. Devon-based Pauline and Robert Chambers have given undertakings that they will refrain from publishing advertisements that formed part of a promotion for a scheme called Your Private Gold-Mine.

The scheme worked by inviting people through direct mailings to join the Private Gold-Mine Organisation. The organisation claimed to be one of the world's most rewarding financial associations, making people millionaires every day, and provided testimonials from individuals who claimed to have profited from the scheme.

It was explained that the capital came from the organisation's other members. The scheme claimed to be different to pyramid schemes and chain letters. However, in order to join the scheme an individual had to pay a £10 membership fee and to earn money the individual had to then buy a 'product' for £10 from another member. The 'product' was actually information on how to generate income from the internet.  

The OFT has received written undertakings from Pauline and Robert Chambers agreeing that they, or their agents, will not publish any misleading mailings or advertisements that are likely to give a false impression as to the earnings that can be achieved; that include false testimonials; or that are likely falsely to convey the impression that an opportunity does not involve soliciting third parties.

The undertakings do not amount to an admission from Pauline and Robert Chambers that they accept that the mailings contained misleading advertisements or that they have done in the past what they are promising not to do henceforth.

John Vickers, OFT Chairman, said:

'Consumers should be on their guard against schemes that promise easy money. If an offer looks too good to be true, it probably is.'

NOTES

1. The Control of Misleading Advertisements Regulations (CMARs) 1988 came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The role of the OFT under the Regulations is to support and reinforce existing controls, not to replace them. The Regulations give the OFT the power to step in if the public interest requires that advertisements complained of should be stopped by means of a court injunction.

2. The OFT can act only when a complaint has been received. To come within its scope an advertisement must be misleading (i.e. it must deceive or be likely to deceive and affect economic behaviour), and be published, in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

3. 'Advertisement' means any form of representation that is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services, immovable property, rights or obligations.

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