Matrix scheme: Difference between revisions

Revision as of 01:10, 17 May 2022

Revision as of 23:06, 2 September 2022

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==History==

The first known matrix scheme is widely believed to be EZExpo.com, which started the popularity of matrix schemes in 2002.<ref name =msn1/> By 2003 more than 200 matrix schemes were in operation, including one which had the same owner as the payment processor [[StormPay]] (TymGlobal). Subsequently, both TymGlobal and StormPay were accused of running an illegal Ponzi scheme.<ref name = leaf>{{cite web | url = https://pixyrs.com/mlm-software-development.php| archive-url = https://web.archive.org/web/20180210194900/http://www.pixyrs.com/mlm-software-development.php| url-status = dead| archive-date = 10 February 2018| title = mlm business | access-date = 10 August 2006}} </ref> StormPay later claimed to be independent of TymGlobal, and they stopped accepting matrix schemes as customers. Although many have since ceased trading, some schemes are still known to be operating worldwide. The payment processor, StormPay, is no longer trading.

==Operation==

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==Legality==

Currently there are no laws specifically naming matrix schemes illegal in the US. However, the US [[Federal Trade Commission]] has issued warnings to the public about these sites. Additionally, the US [[Federal Trade Commission]] and the UK [[Trading Standards]] have issued warnings to the public regarding the ease with which these models can be manipulated for fraudulent purposes. Many of the original matrix sites, including EZExpo.com, are no longer in operation; some of them closed down while defending civil lawsuits. In 2003 EZExpo and several payment processors were sued in the civil courts for running an illegal lottery in the state of California, with the payment processors abetting the scam.<ref>{{cite web | url =http://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=0&doc_id=371626 | title = California Courts – AppelateAppellate Court Case Information -Docket Entries| access-date = 6 August 2005}}</ref><ref>{{cite web | url =http://wagelaw.typepad.com/wage_law/2006/05/prop_64_cases_t.html | title = Wage Law: Prop 64 Cases To Be Argued | access-date = 6 August 2005}}</ref><ref>{{cite web| url = http://www.diaz-law.com/diazlaw/2005/05/prop_64_to_the_.html| title = The Antitrust Monitor: Prop 64 to the Rescue for Neovi, PaySystems, and PayPal But Not for Ginix| access-date = 6 August 2005| url-status = dead| archive-url = https://web.archive.org/web/20070310050844/http://www.diaz-law.com/diazlaw/2005/05/prop_64_to_the_.html| archive-date = 10 March 2007| df = dmy-all}}</ref> However, the civil case is still ongoing. One result of the lawsuit is that those payment processors and some others no longer accept matrix schemes as customers. Currently, no legal precedent exists regarding the matrix scheme in the US.

In the UK, the Office of Fair Trading has declared some of them to be illegal. On 1 July 2005, two matrix sites, pulsematrix.com and phones4everyone (themobilematrix.com), were declared to be running a form of illegal lottery. These two sites promptly closed down as part of a settlement agreement with the Office of Fair Trading (OFT). Other similar matrix sites also used this decision to close down their sites. A few UK matrix sites carried on by utilising contractual law to trade legally, with one major site carrying on until May 2006 when it was sold to a company in Denmark. In the UK there is no specific law against matrix sites.