PYRAMID SELLING ACT, 1980

AN ACT TO PROHIBIT THE INDUCING OF PERSONS TO PARTICIPATE IN PYRAMID SELLING SCHEMES AND TO PROVIDE FOR OTHER MATTERS CONNECTED WITH SUCH SCHEMES. [22nd October, 1980]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

1 Definitions.

1.—(1) In this Act—

“the Minister” means the Minister for Industry, Commerce and Tourism;

“participant”, in relation to a scheme, means a person, other than a promoter, who participates in the scheme;

“promoter”, in relation to a scheme, means a person who promotes a scheme;

“promoters”, in relation to a scheme, means two or more persons acting in concert who promote a scheme;

“scheme” means any trading scheme which includes the following elements, that is to say—

• (a) goods or services, or both, are to be provided by the promoter or, if there are two or more promoters, by one or more of them;

• (b) the goods or services so provided are to be supplied to or for other persons under transactions effected by participants;

• (c) the prospect is held out to participants of receiving payments or other benefits in respect of persons who become participants;

• (d) the scheme makes provision for payments by a participant in the scheme to a promoter of or a participant in the scheme in respect of any one or more of the following—

• (i) his admission to the scheme,

• (ii) his being provided by a promoter of or a participant in the scheme with the goods, or the means of supplying the services, to which the scheme relates,

• (iii) his training for the purposes of the scheme,

• (iv) the promotion, transfer or other change of status in the scheme of a promoter of or a participant in the scheme,

and in this definition “trading scheme” includes any arrangements made in connection with the carrying on of a business, whether those arrangements are made or recorded wholly or partly in writing or not.

• (2) For the purposes of this Act a scheme shall be taken to include the element referred to in paragraph (b) of the definition of “scheme” in subsection (1) of this section whether the transactions referred to in that paragraph are to be effected by participants in the capacity of servants or agents of the promoter or of one of the promoters or in any other capacity.

• (3) For the purposes of this Act such a prospect as is mentioned in paragraph (c) of the definition of “scheme” in subsection (1) of this section shall be taken to be held out to a participant—

• (a) whether it is held out so as to confer on him a legally enforceable right or not, and

• (b) whether it is limited to the introduction of new participants by him or extends to the introduction of new participants by other persons.

• (4) In this Act any reference to the making of a payment to or for the benefit of a person shall be construed as including the making of a payment partly to or for the benefit of that person and partly to or for the benefit of one or more other persons.

• (5) In this Act any reference to the provision of goods or services by a person shall be construed as including a reference to the provision of goods or services under arrangements to which that person is a party.

2 Prohibition on inducing persons to participate in schemes.

2.—(1) The promoter, or any of the promoters of, or a participant in, a scheme or a person acting on behalf of the promoter, or any of the promoters of, or a participant in, a scheme shall not induce or attempt to induce a person to become a participant in a scheme.

• (2) A person who contravenes subsection (1) of this section shall be guilty of an offence.

3 Prohibition of certain payments to promoters of schemes.

3.—(1) If any person who is a participant in a scheme or has applied or been invited to become a participant in a scheme—

• (a) makes any payment to or for the benefit of the promoter of or (if there is more than one) any of the promoters of, or a participant in, the scheme or a person acting on behalf of a promoter of, or a participant in, a scheme, and

• (b) is induced to make that payment by reason that the prospect is held out to him of receiving payments or other benefits in respect of the introduction of other persons who become participants in the scheme,

any person to whom or for whose benefit that payment is made shall be guilty of an offence.

• (2) If the promoter or any of the promoters of, or a participant in, a scheme or a person acting on behalf of a promoter of, or a participant in, a scheme, by holding out to any person such a prospect as is mentioned in subsection (1) (b) of this section, induces or attempts to induce him to make any payment to or for the benefit of the promoter of or (if there is more than one) any of the promoters of, or to or for the benefit of a participant in, the scheme, or to or for the benefit of any person acting on behalf of a promoter of, or a participant in, a scheme, the person inducing him to make that payment shall be guilty of an offence.

• (3) In determining, for the purposes of subsection (1) or subsection (2) of this section, whether an inducement is made by holding out such a prospect as is therein mentioned, it shall be sufficient if such a prospect constitutes or would constitute a substantial part of the inducement.

• (4) Where the person by whom an offence is committed under subsection (1) or subsection (2) of this section or section 2 of this Act is not the promoter or the sole promoter of the scheme in question, any other person who is the promoter or (as the case may be) one of the promoters of the scheme shall, subject to section 5 of this Act, also be guilty of that offence.

4 Return to participants of payments under schemes for goods in certain cases.

4.—(1) A payment to which this section applies by a participant in a scheme to a promoter of or another participant in the scheme or any other person acting in accordance with the scheme (in this section referred to as “a recipient”) shall be returned by the recipient to the participant if the participant returns to the recipient the goods or article in respect of which the payment was made.

• (2)
• (a) Where a participant returns goods or an article under this section to a recipient and the value of the goods or the article decreased while in the possession or under the control of the participant and such decrease was occasioned by the neglect of the participant, an amount equal to the amount of the decrease aforesaid may be deducted by the recipient from the payment falling to be returned by him under this section.

• (b) A deduction shall not be made under this subsection unless, after lodgment of the amount of the payment concerned in the District Court, that Court, upon application to it in that behalf by the recipient concerned, by order authorises the deduction.

• (c) An application under paragraph (b) of this subsection shall be made within 21 days of the receipt by the recipient concerned of a notice in writing stating the intention of the participant concerned to return to the recipient the goods or article concerned.

• (d) An order of the District Court in proceedings under this subsection shall make such provision as that Court thinks proper in relation to the payment to the parties concerned of the amount lodged in that Court under paragraph (b) of this subsection in the proceedings.

• (3) In this section “payment to which this section applies” means a payment by a participant in a scheme to a recipient, being—

• (a) the payment of the price of—

• (i) goods supplied or to be supplied to the participant under the scheme for sale by him, or

• (ii) any article supplied or to be supplied to the participant for the purpose of providing the services to which the scheme relates, or

• (b) any payment by way of security for such goods or articles as aforesaid supplied or to be supplied as aforesaid to the participant.

• (4) An agreement between a promoter or participant in a scheme or a person acting on behalf of a promoter or a participant in a scheme and another person shall, in so far as it provides for the payment of money by that other person to the promoter or the person acting on his behalf or to the participant or the person acting on his behalf in consideration of the provision under the scheme by the promoter or the participant to that other person of goods or services, be null and void; and an action shall not lie in any court for the recovery of the money by the promoter or by the person acting on his behalf or by the participant or the person acting on his behalf from that other person.

5 Defences in certain proceedings.

5.—Where, by virtue of section 3 (4) of this Act, a person is charged with an offence, it shall be a defence for him to prove—

• (a) that the scheme to which the charge relates was in operation before the commencement of this Act, and

• (b) that the act constituting the offence was committed without his consent or connivance.

6 Penalties.

6.—(1) A person guilty of an offence under this Act shall be liable, on conviction on indictment, to a fine not exceeding £10,000 or, at the discretion of the court, to imprisonment for a term not exceeding 2 years or to both the fine and the imprisonment.

• (2) A Justice of the District Court shall have jurisdiction to try summarily an offence under this Act if—

• (a) the Justice is of opinion that the facts proved or alleged against a defendant charged with such an offence constitute a minor offence fit to be tried summarily,

• (b) the Director of Public Prosecutions consents, and

• (c) the defendant (on being informed by the Justice of his right to be tried by a jury) does not object to being tried summarily,

and, upon conviction under this subsection, the said defendant shall be liable to a fine not exceeding £500 or, at the discretion of the court, to imprisonment for a term not exceeding 6 months or to both the fine and the imprisonment.

• (3) Section 13 of the Criminal Procedure Act, 1967, shall apply in relation to an offence under this Act as if, in lieu of the penalties provided for in subsection (3) of the said section, there were specified therein the penalties provided for in subsection (2) of this section, and the reference in subsection (2) (a) of the said section 13 to the penalties provided for in the said subsection (3) shall be construed and have effect accordingly.

• (4)
• (a) Where a court imposes a fine or affirms or varies a fine imposed by another court for an offence referred to in subsection (1) of this section of which a person was convicted and which was dealt with summarily by the District Court, it may, at its discretion, on the application (made before the time of such imposition or affirmation) of any person who was summoned as a witness on behalf of the prosecution in the proceedings in which the fine was imposed and who suffered personal loss resulting, wholly or partly, from the offence, provide by order for the payment of the amount of the fine or of a specified part of it as compensation in respect of the loss to the person making the application.

• (b) An application shall not lie under paragraph (a) of this subsection in respect of any personal loss if proceedings claiming damages for the loss have been instituted in any court.

• (c) Where the whole or part of a fine imposed under this section is paid to a person pursuant to this subsection and the person is awarded damages by a court in respect of the personal loss to which the payment relates, the payment shall be deemed to be in satisfaction of so much of the damages as is equal to the amount of the payment.

7 Offences in relation to bodies corporate.

7.—Where an offence under this Act is committed by a body corporate and the offence is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any person who, when the offence was committed, was a director, member of the committee of management or other controlling authority of the body concerned, or the manager, secretary or other officer of the body, that person shall also be deemed to have committed the offence and may be proceeded against and punished accordingly.

8 Expenses.

8.—The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of monies provided by the Oireachtas.

9 Short title and commencement.

9.—(1) This Act may be cited as the Pyramid Selling Act, 1980.

• (2) This Act shall come into operation on such day as may be fixed by order made by the Minister.