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Office of Competition and Consumer Protection

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First penalty imposed for soliciting into so-called pyramid-type schemes

< previous | next > 22.01.2021

First penalty imposed for soliciting into so-called pyramid-type schemes
  • Almost the maximum penalty for each of the three identified practices - in total nearly PLN 450 thousand - was imposed by the President of UOKiK Tomasz Chróstny on Damian 真kiewicz (INVESTPROVIDER) for promoting pyramid-type incentive schemes.
  • The YouTuber was soliciting to join FutureNet, FutureAdPro and NetLeaders systems, promising benefits depending on the recruitment of new members.
  • This is the first decision of the President of UOKiK against the so-called pyramid scheme shills.

Damian 真kiewicz, who ran a business under the name INVESTPROVIDER - Damian 真kiewicz in Wroc豉w, is a YouTuber who profits from promoting a number of investment projects. He posted materials and videos on his website and YouTube channel where he would solicit consumers to sign up for FutureNet website, the Future AdPro platform, and join the NetLeaders network. In this way he promoted pyramid-type incentive schemes promising profits that depended mainly on recruiting more people into the system. Their organization and promotion is prohibited by law as an unfair market practice. Following the conducted proceedings President of UOKiK Tomasz Chróstny stated that by promoting such systems Damian 真kiewicz infringed collective interests of consumers.

“Pyramid-type incentive systems are prohibited by both Polish and European law. We must eliminate them quickly and effectively from the market, since consumers lose their savings due to their operations. An important element in the case of this type of projects are the so-called "shills" - people who promote these "projects" consciously and for a fee, recruiting more and more consumers into them. But for their activities, pyramid promotional systems would not have the potential to efficiently attract new participants. Shills must be held accountable for their actions that mislead consumers, which result in serious financial losses to consumers and can lead to grave human tragedies. Having conducted the proceedings, I decided to impose on Damian 真kiewicz a penalty of nearly PLN 450 thousand. For each of the practices found, relating to the on-line promotion of illegal investments, misleading consumers and deluding them with visions of great profits, I imposed a near maximum statutory financial sanction. We carry out further operations against the organizers and promoters of pyramid schemes, each time informing law enforcement agencies about our suspicions,” says Tomasz Chróstny, Presiden of UOKiK.

FutureNet and FutureAdPro

Running the business activity under the name INVESTPROVIDER - Damian 真kiewicz on his website in videos available on YouTube until June 2019 was soliciting users to register on the FutureNet portal and FutureAdPro advertising platform run by the companies FUTURENET UKRAINE from Lviv and BCU Trading from Dubai. They would promise remuneration for recruiting new members into the system, persuading them to buy participation packages or statuses. The benefits depended primarily on the recruitment of new members into the scheme. UOKiK warned against them already in March 2019. In July 2020 President of the Office Tomasz Chróstny issued  a decision, in which he recognised that these projects were illegal pyramid-type incentive schemes. The investigation into FutureNet and FutureAdPro under the Ref. No. PO 2 Ds. 63.2016 is conducted by the District Prosecutor's Office in Wroc豉w.

Sie NetLeaders

Damian 真kiewicz also promoted the NetLeaders network on the Internet. It is an initiative of CL Singapore company, aimed at marketing the DasCoin cryptocurrency. The company offered licenses that used to cost from EUR 100 to EUR 25 thousand and promised profits if someone would solicit other people to invest their money. UOKiK warned against CL Singapore in March 2019, and in December 2019 the UOKiK issued  a decision, in which he recognised that it was a pyramid-type incentive scheme. The District Prosecutor's Office in Warsawis also interested in this case and conducts investigations against both CL Singapore (Ref. No. PO 5 Ds. 33.2017), as well as the investigation into Netleaders/DasCoin (sign. PO III Ds. 176.2018).

Methods of promoting systems

In order to incite Internet users to register in the aforementioned systems, invest in them and recruit their friends into them, Damian 真kiewicz used to publish such entries:

  • If you want to earn a minimum of 5,000 PLN per month on-line. If you want to quit a full-time job you're not happy with forever, then don't hesitate and don't listen to your loser friends, just DO IT! What are you supposed to do? Let's start with the basics and sign up for at least 5 schemes that will be the basis of your passive income. Neither I nor any other leader making a minimum of $1,000 a day online today has skipped this step.
  • NetLeaders is very generous in rewarding individuals who contribute to the rapid growth of the company, thanks to which the DasCoin cryptocurrency along with the DasPay payment system will become widely known and used sooner. DasCoin - remuneration for February 2017 is approximately PLN 94,000.

As proof aimed at convincing consumers to invest, Damian 真kiewicz posted photos that he described as statements from his bank account and PIT statements. He was also luring with trips to exotic countries. He even encouraged people to take out loans in order to get money to buy more packages, statuses or licenses.

Penalty and remedying the effects of the infringement

The penalties which may be imposed for a practice violating collective consumer interests may amount to as much as 10% of the turnover of a given undertaking. In this context, an entrepreneur is considered to be not only a person registered in Central Registration and Information on Business, but anyone - including bloggers, influencers - who in an organized and continuous manner actually runs a business and profits from, inter alia, launching, managing or promoting pyramid-type incentive schemes.

Damian 真kiewicz was charged with a penalty of PLN 437,655 by the President of UOKiK. In addition, the entrepreneur must inform about his fraudulent business practices and communicate the decision of the President of UOKiK on the following website and on its Youtube channel. Regarding the latter, the statement is to be not only in written form, but also in audio form and accompanied by appropriate hashtags.

The decision of the President of UOKiK is not yet final. The entrepreneur may appeal against it to the court.

How to recognize a pyramid scheme

The pyramid-type incentive schemes are systems in which the consumer is solicited to participate in the "project" in the sales system in exchange for the promise of remuneration or other material benefits, which depend primarily on the recruitment of more people into the system and not on the sales or consumption of goods. Such schemes typically involve investments in tokens, cryptocurrencies, educational or language packages, apartments, etc. As a rule, the pyramid-type scheme operates in the following manner: you pay in money and recommend others, for which you receive remuneration if they join in. It comes from the contributions of the persons which you recommended either directly or indirectly. This way it is you, your friends and acquaintances who finance the scheme. However, after a certain period of time the system collapses since the money that you pay are not invested in any assets and do not yield any profits. The money goes to their organizers and people in the top position in the chain. The system works as long as the number of people joining the system and contributing money increases exponentially. The condition for such a system to work is a continuous increase in the money paid in, which is not possible. Eventually, the system collapses and all your money is lost. Pyramid-type incentive schemes are hidden under the slogans “program”, “investments”, “making money on the Internet”, “work from home”, “advertising platform”. They are often credited by celebrities, who take part in events promoting fraudulent projects, organized by scheme owners and shills. Sometimes they use images of famous people - actors, businessmen or athletes, stolen by dishonest entrepreneurs to promote an illegal enterprise.

Some such undertakings may also have the character of the so-called financial pyramid, i.e. fraud (Art. 286 of the Penal Code), which takes place in an organized manner. In such a situation it is best to inform the law enforcement authorities (police, prosecutor's office).

Consumer support:

Phone: 801 440 220 or +48 22 290 89 16 – consumer helpline
Email: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer advocates – in your town or district

Additional information for the media:

UOKiK Press Office
Pl. Powsta鎍ów Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files


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