Territorial Extent Schedule 6: Exchange of information: persons and bodies Part 3: General Offences Section 43: Chain-gift schemes
166.This section makes provision for the prohibition of chain-gift schemes. The offence extends to Northern Ireland, as well as England, Scotland and Wales.
167.A chain-gift scheme is an arrangement in which, in order to join, people must pay a joining fee to one or more of the other participants in the scheme. People who take part in the scheme are required or invited to encourage other people to join. A person who participates in the arrangement does so having been encouraged to believe that he will receive back more than his initial joining fee, from the fees paid by other participants. The joining fee must be a payment of money or money's worth, but it does not include goods or services.
168.Subsection (1) makes it an offence to invite another person to join such a scheme. It is also an offence to knowingly participate in the promotion of the scheme. It will not, however, be an offence for a person merely to join the scheme. People who participate unwittingly in the promotion of a chain gift scheme, such as the host of an internet discussion forum upon which a posting promoting a chain-gift scheme has been made, will not commit an offence, provided they are unaware that the posting promotes a chain-gift scheme. People who knowingly participate in the administration or management of the scheme will also commit an offence.
169.Subsection (3)(b) provides that the offence is committed irrespective of whether the joining fees are paid directly between the participants in the scheme or through a person responsible for managing or administering the scheme. The penalty is a maximum term or imprisonment of 51 weeks in England and Wales (or 6 months in Scotland and Northern Ireland), and/or a fine up to level 5 on the standard scale.