# The Pyramid Selling Schemes Regulations 1989, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations revoke the Pyramid Selling Schemes Regulations 1973 (except for regulations 5 and 6 and 10(1), (2) and (3) which continue to apply to contracts made before 1st March 1990) and replace them with new provisions.
The Regulations follow the framework of the 1973 Regulations but require warning notices in relation to pyramid selling to be included with the degree of prominence laid down in these Regulations in specified promotional material (regulation 4(1)(v) and Part I of the Schedule) and in contracts (regulation 7(e) and Part II of the Schedule).
Regulation 3 follows Regulation 1(2) of the 1973 Regulations save that the sum referred to in regulation 3(b) is now £30, having been £10 in the 1973 Regulations.
Regulation 4 regulates the contents of advertisements, notices, prospectuses and circulars relating to pyramid selling except those which do not state the financial benefits which will or may be obtained from the scheme or which form part of a newspaper or magazine or which are handed to persons in a public place.
Regulation 5 requires a warning statement to appear immediately underneath any claim in promotional material that specified financial benefits can be obtained under the scheme.
Regulation 6 prohibits the supply of goods or services under a scheme or the acceptance of payment for goods or services unless the parties have signed a written agreement complying with the provisions of regulation 7 and a copy of that agreement has been supplied to the participant joining the scheme.
Regulation 7 requires specific matters to be included in written contracts.
Regulation 8 deals with the right to terminate the contract. This largely repeats regulation 6 of the 1973 Regulations but the period of time within which termination is permitted without penalty and with the right to require repayment of monies as specified in regulation 8(1)(b) is increased from 7 to 14 days.
Regulation 9 prohibits a promoter or a participant from accepting any sum exceeding £75 from a new participant until seven days have expired from the making of the contract.
Regulation 10 prohibits the taking of security.
Regulation 11 prohibits the acceptance of payments for training facilities unless it is made clear that the participant has a free choice whether or not to use the facilities and the charge is clearly stated.
Regulation 12 largely repeats regulation 10 of the 1973 Regulations and sets out the civil consequences of a breach of the Regulations.

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Source: https://www.legislation.gov.uk/uksi/1989/2195/note (the official version)
Page: https://openlegislation.uk/pyramid-selling-schemes-regulations-1989/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.