• Wisepro Foctral and Vital Trading were responsible for operations of an illegal pyramid-type incentive scheme.
• The companies promised financial gains which first and foremost were dependent on the introduction of subsequent participants into the system.
• President of UOKiK has imposed fines on both companies and two managers.

Pyramid-type incentive schemes are an illegal, unfair market practice. They consist in building a sales network by way of promising gains which first and foremost depend on the introduction of subsequent persons into the system. The person who decides to join such a scheme pays the money in and next induces others to do the same. Remuneration will be paid for introducing new participants. Unfair companies build sales structures with the use of various consumer-attractive issues such as health, fitness, education or investments.

That was the method of operation of Wisepro Foctral which established, ran and promoted Properly Partnership Scheme, while Vital Trading company supported it in its promotional and marketing activities.

Training platform versus Properly Partnership Scheme

Properly is an online training platform for persons wishing to become traders, that is, to perform transactions on the Forex market, which declared it would create safe and sound conditions for making investments. Purchase of a training package of EUR 1,000, EUR 2,000 or EUR 4,000 was enough to use the company’s offer. Additionally, you could join the partnership scheme and boost your profits by introducing subsequent persons into the system. High package prices, however, were not a consequence of the services of adequate value offered to the participants, but their aim was merely to provide the entrepreneur with an uninterrupted influx of cash.

Each introducer could earn some remuneration from maximum five levels of the structure erected. Therefore, they earned money not only because of the persons they had introduced but of subsequent individuals encouraged by the latter. The system provided for some additional bonuses for generating high levels of package sales. UOKiK has found that the gains from the partnership scheme were much higher than from  trading; this pertained to both entrepreneur’s gains and the gains of individual traders. For example, one of the traders-partners earned EUR 533 from trading during the period under analysis while they earned 14-time higher amount from commission due to introducing new persons.

- Internet, social media facilitate swift communication and building range. This is a perfect environment for unfair entrepreneurs who decide to create pyramid-type incentive schemes. This is why we take up intensive activities to efficiently protect consumers and eliminate those dangerous and unfair market practices. We are holding 15 proceedings relating to this negative phenomenon. Such systems must collapse after some time as the money goes solely to their organisers and people in the top position in the pyramid. We are calling on consumers to invest their savings reasonably - says Tomasz Chróstny, President of UOKiK.

The President of UOKiK had found a violation of collective interests of consumers by the companies: Wisepro Foctral and Vital Trading and has imposed PLN 156,587 of aggregate fine on the enterprises and two managers of Vital Trading - Miłosz Cichocki and Bartłomiej Zieliński, who were also the shareholders of Wisepro Foctral. The decisions of UOKiK are not legally valid.

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