15/9/04
Australia's Consumer Protection agencies have seized 80,000 illegal 'David Rhodes' chain letters so far this year, sparking a co-ordinated national approach to stopping this widespread scam.
Consumer Protection Minister John Kobelke said all States were joining forces and sharing information to cast a wide net, to catch those spreading the scam through the mail, on fax and now even via email.
"Consumer Protection agencies throughout Australia take this matter very seriously and each State will be taking action in the near future against those participating in the scam," Mr Kobelke said.
"In Western Australia, the Gallop Government has supported a proactive approach to Consumer Protection to help reduce rip-offs and stamp out scams.
"People sending chain letters could face prosecution, a hefty fine or an enforceable undertaking - it is just not worth the risk.
"Regardless of what claims are made, this chain letter is a pyramid selling scheme, which is illegal throughout Australia and specifically prohibited by the Fair Trading Act."
Mr Kobelke urged Western Australians receiving the 'David Rhodes' chain letter to send it to WA ScamNet, operated by the Department of Consumer and Employment Protection, to provide investigators with the names and addresses of participants.
"In WA alone, more than 5,000 of these chain letters have already been seized with the help of Australia Post and Consumer Protection is actively pursuing three suspects in the scam," he said.
"No one interviewed so far has made any money from the scheme - in fact, they are out of pocket for postage and photocopying and could be facing a fine of up to $20,000 added into the bargain."
The Minister said the chain letter allegedly from a 'David Rhodes' claimed $218 could be turned into $77,760 within 60 days of operating the suggested 'business plan'.
"This type of scam has been around for a while and names used previously include 'David Stein', 'Edward L Green', 'Jason Lee' and 'Steve Collins'," Mr Kobelke said.
"Rhodes claims to have made more than $1million from the scheme and insists it is a 'legitimate business opportunity and perfectly legal', which it is not."
Mr Kobelke said the scam involved sending $10 to the name on the top of a list, deleting that name and then adding your own name to the bottom of the list before sending the letter or email to another 200 or more people.
"Like many schemes, the 'David Rhodes' letter also includes glowing testimonials but people should remember there is no proof that these are real," the Minister said.
"Participants may face fines of up to $20,000 for an individual and $100,000 for companies."
For information on how to spot this or a range of other scams, visit http://www.docep.wa.gov.au or obtain a free copy of the 'Little Black Book of Scams' by calling your local Consumer Protection office on 1300 30 40 54.
Letters received can be sent to:
WAScamNet
Reply Paid 64772
Locked Bag 14
Cloisters Square WA 6850
(No postage stamp required)
Fax: 9282 0862
Minister's office: - 9222 9211
