Illinois v. Unimax , 168 Ill. App.3d 718 (1988)

Illinois v. Unimax

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The Court of Appeals held that Unimax's program violated that state pyramid statute. Marketers received a percentage of the monthly dues of those subscribers in their downline. A marketer was required to recruit subscribers and all were encouraged to become marketers, and subscribers in order to make money from their association with Unimax. If a marketer didn't want to join as a subscriber, they had to pay a set-up fee, but subscribers who also marketed did not have to pay this additional fee. The Court found that the set up fee was in place to pressure marketers to draw more members into the subscriber base, a practice indicative of an illegal pyramid scheme. This, coupled with the factual admission that there were no marketers who were not also subscribers, convinced the court that the point of the program was to recruit people, and not to sell a good or service, a violation of the state statute.

Full case and summary also available at: http://www.mlmlegal.com/legal-cases/Illinois_v_Unimax.php

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Published In: MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 7th Circuit, Illinois | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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