Fair Trading Minister Virginia Judge is alerting consumers to avoid pyramid schemes following investigations into a get rich quick scheme.

Ms Judge said the promotional material of a marketing scheme known as Liberty League may potentially breach the Fair Trading Act.

Ms Judge said Liberty League is an American based company that markets lifestyle coaching products and is being monitored for any evidence that it is active in NSW.

“Ultimately it is for a court to determine if Liberty League is a pyramid selling scheme,” Ms Judge said.

“However, consumers should be wary and if they have any concerns about the company’s activities they should contact Fair Trading immediately on 13 32 20.

“While pyramid selling schemes can often be very seductive they are designed to fail because they need an endless flow of new recruits to remain viable.

“My message to consumers is: avoid pyramid selling schemes at all costs because if it sounds too good to be true, it usually is.”

Ms Judge said pyramid schemes were an illegal form of multi-level marketing where participants receive benefits by recruiting other participants to invest money.

“The money paid by new recruits enriches those who joined the scheme earlier and are closer to the top of the pyramid,” she said.

“Some pyramid schemes involve the sale of goods or services (usually of token value) while the more blatant schemes involve the investment of money only. These schemes often claim to be games, investment clubs or self-help schemes.

“Section 60U of the Fair Trading Act states very clearly that a person must not participate in a pyramid selling scheme or induce another person to join one.

“The maximum penalty for breaking this law is $22,000 for individuals and $110,000 for corporations.”

Ms Judge said Fair Trading had notified other Australian consumer protection agencies about Liberty League so they could monitor the situation.