The Estonian Consumer Protection Board has warned the public against joining the Mavrody pyramid scheme advertisements of which have appeared in the media.
Estonian consumer authority warns public of pyramid scheme
28th March 2013, 14:50
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This time we are dealing with a scheme bearing the name Mavropoly and also MMM, which is known from earlier times as Sergey Mavrody pyramid scheme. "The Consumer Protection Board advises consumers to ignore these calls and not to join [the scheme]," a spokesperson for the Consumer Protection Board told BNS.
According to the Estonian consumer protection authority, the said service is a service for the provision of which an unfair and forbidden method of trade is used and which harms the interests of consumers.
The Consumer Protection Board has notified the party that published the advertisement of the opening of misdemeanor proceedings. Also the publication of advertisements of a service like this is punishable.
A pyramid scheme is a fraudulent business model that builds on promising participants payment or services primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public, the Consumer Protection Board said.
The Russian businessman Sergey Mavrody, believed to stand behind the scheme, is known as a founder of a series of pyramid schemes. He was found guilty by a Russian court in 2007 of defrauding 10,000 investors out of 110 million roubles (4.3 million US dollars). According to news outlets he launched a pyramid scheme in India, called MMM India, in 2011, and has been reported to be trying to expand his operations into Western Europe and America.