Matrix scheme: Difference between revisions

Revision as of 10:10, 6 June 2019

Revision as of 01:28, 26 September 2019

Line 1:

{{EngvarB|date=January 2014}}

{{Use dmy dates|date=January 2014}}

A '''matrix scheme''' (also known as a '''matrix sale''' or '''site''', and as a '''hellevator''', '''excavator''' or '''ladder scheme''') is a [[business model]] involving the exchange of money for a certain product with a side bonus of being added to a waiting list for a product of greater value than the amount given.<ref name=oftpress>{{cite web|url=http://www.oft.gov.uk/news/press/2005/161-05 |title=Matrix Website Scheme stopped by Office of Fair Trading |accessdate=5 August 2006 |deadurlurl-status=yesdead |archiveurl=https://web.archive.org/web/20070314233701/http://www.oft.gov.uk/news/press/2005/161-05 |archivedate=14 March 2007 |df= }}</ref> Matrix schemes are also sometimes considered similar to [[Ponzi scheme|Ponzi]] or [[Pyramid scheme|pyramid]] schemes.<ref name =msn1>{{cite web | url = http://msnbc.msn.com/id/3078957 | title=$150 plasma TV site faces lawsuit | accessdate=5 August 2006|archive-url=https://web.archive.org/web/20070219081023/http://msnbc.msn.com/id/3078957/|archive-date=19 February 2007}}</ref> They have been called "unsustainable" by the United Kingdom's [[Office of Fair Trading]].<ref name =oftpress/> A matrix scheme is also an example of an 'exploding queue' in [[queueing theory]].

==History==

Line 44:

==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 – Appelate Court Case Information -Docket Entries| accessdate = 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 | accessdate = 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| accessdate = 6 August 2005| deadurlurl-status = yesdead| archiveurl = https://web.archive.org/web/20070310050844/http://www.diaz-law.com/diazlaw/2005/05/prop_64_to_the_.html| archivedate = 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.