Trading Schemes Regulations 1997
| Jurisdiction | UK Non-devolved |
| Citation | SI 1997/30 |
| Year | 1997 |
1997 No. 30
FAIR TRADING
The Trading Schemes Regulations 1997
Made 13th January 1997
Laid before Parliament 14th January 1997
Coming into force 6th February 1997
The Secretary of State in exercise of his powers under section 119 of the Fair Trading Act 19731hereby makes the following Regulations:–
Citation, commencement and application
1.—(1) These Regulations may be cited as the Trading Schemes Regulations 1997 and shall come into force on 6th February 1997.
(2) Subject to paragraph (3) below, these Regulations shall apply–
(a)
(a) from the date of their coming into force to any trading scheme to which Part XI of the Fair Trading Act 1973 applies and which came into existence on or after the date of coming into force of these Regulations, and to any agreement made under such a trading scheme;
(b)
(b) after a period of six months from the date of their coming into force to any trading scheme in existence prior to the coming into force of the Act and to which Part XI of the Fair Trading Act 1973 did not apply prior to that date.
(3) Where an agreement is made after the date of coming into force of these Regulations but prior to the expiry of a six months period after that date under a trading scheme to which Part XI of the Fair Trading Act 1973 applied prior to the coming into force of the Act such agreement shall comply either with the 1989 Regulations or these Regulations.
(4) Subject to paragraph (3) above the 1989 Regulations shall not apply to any trading scheme coming into operation after the date of the coming into force of these Regulations or to any agreement made after that date under any trading scheme to which Part XI of the Fair Trading Act 1973 applies.
Interpretation
2. In these Regulations:
“the Act” means the Trading Schemes Act 19962;
“advertisement” means any advertisement, document, prospectus, circular or notice, whether transmitted in electronic or any other form, which promotes a trading scheme;
“the 1989 Regulations” means the Pyramid Selling Schemes Regulations 19893;
“the 1990 Regulations” means the Pyramid Selling Schemes (Amendment) Regulations 19904;
“participant” has the same meaning as in Part XI of the Fair Trading Act 19735;
“security” means a mortgage, charge, pledge, bond, debenture, indemnity, guarantee, bill, note or other right provided by the participant, or at his request (expressed or implied), to secure the carrying out of the obligations of the participant under an agreement referred to in regulation 4.
“trading scheme” has the same meaning as in Part XI of the Fair Trading Act 1973.
Contents of advertisements
3.—(1) Subject to paragraph (2) of this regulation, a promoter of, or a participant in, a trading scheme shall not issue, circulate or distribute any advertisement which contains information likely to lead directly or indirectly to persons becoming participants in a trading scheme by any means unless such advertisement
(a)
(a) states the name and address of the promoter, or in the case of a scheme promoted by more than one person, the names and addresses of all of the promoters;
(b)
(b) describes the goods or services acquired or supplied under the trading scheme; and
(c)
(c) contains the words set out in Schedule 1 to these Regulations which must
(i) not appear at the beginning or the end of the advertisement;
(ii) insofar as the advertisement contains any information as to the sources of income for participants from participation in the trading scheme, appear together with such information and be given no less prominence than such information;
(iii) be easily legible or audible; and
(iv) be afforded no less prominence than that given to any other information in the advertisement apart from the heading of the advertisement.
(2) This regulation does not apply to any advertisement which–
(a)
(a) forms part of a newspaper or magazine; or
(b)
(b) is transmitted by way of a radio or television broadcast.
Pre-performance requirements
4.—(1) Save where the requirements set out in paragraph (2) below are satisfied, no promoter of, nor participant in, a trading scheme shall–
(a)
(a) supply goods or services to a participant in the trading scheme;
(b)
(b) provide any goods or services under a transaction effected by such a participant;
(c)
(c) be a party to any arrangement under which goods or services are supplied or provided as aforesaid; or
(d)
(d) accept from any such participant any payment or undertaking to make a payment in respect of any goods or services supplied or provided as mentioned in any of the preceding paragraphs (a) to (c) above or in respect of any goods or services to be so supplied or provided.
(2) The requirements referred to in paragraph (1) above are that–
(a)
(a) the arrangements with a participant do not include a statement or promise that the participant will receive a payment or benefit in respect of the continued participation of another person in the trading scheme to which such arrangements relate or in any other trading scheme;
(b)
(b) the promoter or a participant and the participant joining the trading scheme shall have signed a written agreement which contains all the terms under which the participant joining the trading scheme is participating in the trading scheme and which complies with regulation 5;
(c)
(c) a copy of that agreement shall have been furnished to the participant joining the trading scheme.
Contents of contracts
5. — The agreement referred to in regulation 4 shall include:–
(a) the name and address of the promoter or, in the case of a scheme promoted by more than one person, the names and addresses of all the promoters;
(b) a description of the goods or services to be acquired by or supplied to the participant by the promoter or promoters, other participants or suppliers nominated by the promoter or promoters or any other person under the trading scheme;
(c) a statement describing the capacity in which the participant shall act for the purposes of any transaction which he may effect under the trading scheme;
(d) a statement describing the financial obligation of the participant during the period of twelve months from the commencement date of the agreement. The promoter shall give to the participant at least 60 days advance written notice of any subsequent changes in such financial obligation.
(e) a statement describing the right of the participant to cancel the agreement:–
(i) within 14 days of entering into the agreement without penalty and with the right to recover any monies which he had paid to or for the benefit of the promoter or any of the promoters or any other participant in connection with his participation in the trading scheme or paid to any other participant in accordance with the provisions of the trading scheme and the manner in which that cancellation and recovery shall be effected;
(ii) within 14 days of entering into the agreement the right to return to an address specified in the agreement which must be an address in the United Kingdom, any goods the participant has purchased within that period under the trading scheme and which remain unsold provided that such unsold goods remain in the condition in which they were in at the time of purchase, whether or not their external wrappings have been broken and to recover any monies paid in respect of such...
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