UK scam victims to be compensated

US authorities have set aside $20m in compensation

More than 25,000 UK-based victims of a pyramid investment scam could receive compensation after action by US authorities.

The US Federal Trade Commission has set $20m (£11m) aside to compensate victims of Oklahoma-based firm Skybiz.

Skybiz offered a return on a financial investment based on the number of new recruits to the scheme.

UK victims have been urged to check www.skybiz-redress.com for details of the compensation scheme.

Lost money

Between 1998 and 2001 Skybiz sold e-commerce web packs for $125 on the premise that purchasers could make money if they could persuade others to buy the pack.

Consumers were recruited to the scheme in the US, UK, Ireland, Australia, South Africa, New Zealand and Canada. Skybiz investors were misled about the likely returns.

There were simply not enough people to support the scheme indefinitely and, as a result, many investors lost money.

The Federal Trade Commission has now stopped skybiz from operating and set up the compensation fund.