Curse of the Pyramid

Pyramid schemes seem to offer huge returns

From the Isle of Wight to the Scottish lowlands the talk in corner shops and hairdressers is about pyramids.

A cleverly written brochure is being photocopied and distributed.

People are being seduced into emptying their bank accounts, or even borrowing on credit cards, to hand over £3000 to a stranger, with the promise of receiving £24,000 within weeks.

This is a classic pyramid scheme with a twist. It's promoted as "Women Empowering Women", a support network giving women financial independence.

Like any pyramid, it eventually collapses under the weight of its own mathematics, and many "investors" are left penniless.

Collapse

Linda Smith, a trainee Business and Economics teacher, has seen the damage that this fever can do. Her son-in-law set up a smaller pyramid scheme.

A few people made money, but as the inevitability of the collapse became clear to him - he fell apart. He was admitted to a psychiatric ward and his mother-in-law picked up the pieces.

Linda joins Inside Money presenter Lesley Curwen to investigate why it is still legal to make money from others in this way.

Internet links:

 Institute of Trading Standards
 Department of Trade and Industry
 Attorney General New York State
 Information from US Campaigner

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