Mrs BRAHAM - 1996-10-10
Several of my constituents have contacted me recently following reports about chain letters and games such as Joker 88 and The Golden Circle. Most of these constituents have been fairly disgusted, and have been concerned that some people may be fooled by these letters. However, there are some that seem to support them. They want to know why the government does not support these games when people stand to make considerable amounts of money from them. What is the government's position on chain letters and money games?
ANSWER
Mr Speaker, I thank the honourable member for her question. I know she has taken a personal interest in this. I myself, and I am sure other members, have received letters from constituents who believe that governments, including the Northern Territory government, have been particularly unfair in the way that they have denigrated these schemes. These constituents believe that they provide an honest way to make a dollar and obtain a little windfall. It is sad that the sort of misinformation that is being promoted receives so much support generally.
This is a good opportunity for me to put the record straight in relation to these games. I refer to games such as Joker 88, The Golden Sphere and Pentagono which are current. I emphasise at the outset that these games are illegal. To promote these games is illegal and to participate in these games is illegal. Generally, governments have been fairly tolerant to date, but the governments of all states and territories are about to move fairly heavily on participants and promoters.
One of the claims made by the promoters is that the games are legal in Germany and have the blessing of that government. The Victorian Office of Fair Trading has spoken to the German Embassy and has established that this is definitely not true. The promoters claim that the New Zealand government declared the scheme illegal initially but that, when it realised how good it was, it changed its mind. New Zealand Consumer Affairs advises that this is definitely not true. The promoters claim that the Australian Taxation Office has given the scheme its seal of approval. The ATO advises that this is definitely not true. The promoters claim also that the New South Wales Minister for Fair Trading was an opponent and now supports the scheme. She is adamant that this is not true, and is moving fairly heavily in her state on this.
I will explain how the schemes work, for the benefit of colleagues and constituents. A person receives a letter inducing them to purchase a certificate, at a cost of, say, $50, from an existing participant on the promise of receiving vast amounts of money. In the case of Joker 88, $109 000 is the figure mooted. Having purchased the certificate, the new participant must then deposit $50 into the bank account of the person whose name appears at the top of the list of 7 names which appear on the certificate, and send DM50 - approximately $A50 - in
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traveller's cheques with personal details and a reply-paid postage coupon to the company that originated the game in Germany. The company then sends the new participant 3 new certificates with the new participant's name included at the end of the list of names. The participant must then sell these 3 certificates to other people for $50 each. Each of the 3 people to whom these certificates are sold must then repeat this whole process. The name originally at the top of the list is deleted when the new name is added at the bottom. The number of participants increases exponentially by a factor of 3 with each generation of sales.
What the letter does not point out is the simple mathematics of the number of people who need to be involved consistently in the game if a participant is ultimately to receive the promised vast amounts of money. For instance, if the person who starts the game is to obtain $109 000, 2187 people would have to subscribe. For the second generation, for those 2187 people, to obtain their $109 000 each, 4.75 million people would have to subscribe, and for them to obtain their money, in excess of 10 000 million would need to subscribe. The fact is that there are not that number of people in the world. It is a scam. It is a rip-off.
Governments have been fairly tolerant in the past, but throughout Australia we are moving on this now. For those who participate, I emphasise that it is illegal. They need to be very clear about that, as do those who promote it. They will soon be feeling the full weight of the law.
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ANSWER
Mr Speaker, I thank the honourable member for her question. I know she has taken a personal interest in this. I myself, and I am sure other members, have received letters from constituents who believe that governments, including the Northern Territory government, have been particularly unfair in the way that they have denigrated these schemes. These constituents believe that they provide an honest way to make a dollar and obtain a little windfall. It is sad that the sort of misinformation that is being promoted receives so much support generally.
This is a good opportunity for me to put the record straight in relation to these games. I refer to games such as Joker 88, The Golden Sphere and Pentagono which are current. I emphasise at the outset that these games are illegal. To promote these games is illegal and to participate in these games is illegal. Generally, governments have been fairly tolerant to date, but the governments of all states and territories are about to move fairly heavily on participants and promoters.
One of the claims made by the promoters is that the games are legal in Germany and have the blessing of that government. The Victorian Office of Fair Trading has spoken to the German Embassy and has established that this is definitely not true. The promoters claim that the New Zealand government declared the scheme illegal initially but that, when it realised how good it was, it changed its mind. New Zealand Consumer Affairs advises that this is definitely not true. The promoters claim that the Australian Taxation Office has given the scheme its seal of approval. The ATO advises that this is definitely not true. The promoters claim also that the New South Wales Minister for Fair Trading was an opponent and now supports the scheme. She is adamant that this is not true, and is moving fairly heavily in her state on this.
I will explain how the schemes work, for the benefit of colleagues and constituents. A person receives a letter inducing them to purchase a certificate, at a cost of, say, $50, from an existing participant on the promise of receiving vast amounts of money. In the case of Joker 88, $109 000 is the figure mooted. Having purchased the certificate, the new participant must then deposit $50 into the bank account of the person whose name appears at the top of the list of 7 names which appear on the certificate, and send DM50 - approximately $A50 - in
Page 1668
traveller's cheques with personal details and a reply-paid postage coupon to the company that originated the game in Germany. The company then sends the new participant 3 new certificates with the new participant's name included at the end of the list of names. The participant must then sell these 3 certificates to other people for $50 each. Each of the 3 people to whom these certificates are sold must then repeat this whole process. The name originally at the top of the list is deleted when the new name is added at the bottom. The number of participants increases exponentially by a factor of 3 with each generation of sales.
What the letter does not point out is the simple mathematics of the number of people who need to be involved consistently in the game if a participant is ultimately to receive the promised vast amounts of money. For instance, if the person who starts the game is to obtain $109 000, 2187 people would have to subscribe. For the second generation, for those 2187 people, to obtain their $109 000 each, 4.75 million people would have to subscribe, and for them to obtain their money, in excess of 10 000 million would need to subscribe. The fact is that there are not that number of people in the world. It is a scam. It is a rip-off.
Governments have been fairly tolerant in the past, but throughout Australia we are moving on this now. For those who participate, I emphasise that it is illegal. They need to be very clear about that, as do those who promote it. They will soon be feeling the full weight of the law.
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Last updated: 09 Aug 2016