Chain referral and pyramid schemes in Illinois

On Behalf of | Jun 1, 2018 | consumer fraud |

Illinois and Indiana consumers should be able to participate in the marketplace without fear of being taken advantage of by others. This is why the law seeks to protect these consumers from fraud. Unfortunately, though, far too many individuals are unaware of the legal protections afforded to them. As a direct result, many individuals who are victims of consumer fraud suffer severe financial losses that could otherwise be recovered through legal action. In hopes of better informing individuals of their legal rights, this week we will look at one aspect of Illinois law.

Many Illinois residents have been subjected to what some would consider creative marketing tactics. Amongst those are ploys that are essentially chain referral sales. Here, a seller convinces a buyer to purchase goods or services after informing him or her that a commission or rebate can be obtained by furnishing contact information for other prospective buyers. If the offered rebate or commission is contingent upon the prospective buyers purchasing goods or services, then the act is illegal.

This type of business practice is very similar to the standard pyramid scheme, whereby an individual, in exchange for money, is promised the opportunity to obtain money other items of value if he or she can convince others to participate in the scheme. These types of schemes are illegal, generally speaking, as they are often deceptive and can lead to consumers being taken advantage of without them knowing it until it’s too late.

Those who have been affected by consumer fraud should consider taking legal action against those who have wronged them. If they are able to succeed on a legal claim against fraudulent actors, then it may be possible to recover compensation for damages that were suffered. This can be a complicated area of the law, though, with challenging evidentiary issues. Therefore, those affected by consumer fraud should consult with a legal professional before moving forward with a claim.