February 13, 1996 - The Attorney General's Office today warned consumers to avoid illegal pyramid schemes including those involving long distance phone cards.
Consumers from Vancouver to Tacoma already have been lured with promises of 1000 percent return on an initial investment of about $100. The scheme is also expected to hit the Seattle area and Eastern Washington. About 10 consumers have filed formal complaints, although many more individuals have contacted the Attorney General's Office to inquire about the scam.
What consumers get for their so-called "investment" is a long distance phone card with so many minutes of calling and a sales kit explaining how to recruit others into the scheme. Recruiting others qualifies people to make "the big return on their investment." This promise, however, also makes it an illegal pyramid.
Consumers considering participating in such a scheme should ask themselves some key questions, according to Attorney General Christine Gregoire:
- Must I make an initial investment to earn the right to recruit others?
- Must I recruit others into the program to get whatever compensation has been promised? [This compensation may be money or anything else of value.]
- Are those I recruit also required to make an initial investment to earn the right to recruit others and to receive the promised compensation?
"If you answer "yes" these questions, this is not an investment," Gregoire said. "It's an illegal pyramid and you're breaking the law if you participate."
For more information call the Attorney General's Office at 1-800-551-4636, or for the hearing impaired, contact 1-800-833-6384.
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Contacts: Donna Fisher, Assistant Attorney General
Janice Marich, Public Affairs
June Bachman, Consumer Resource Center, Vancouver