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SkyBiz back under microscope

ABOUT five or six months ago I wrote a story about a warning issued by the Ministry of Fair Trading regarding web-based business SkyBiz.

The warning from the Ministry related to the prospect that the business involved “referral selling” which would put it at odds with our legislation.

SkyBiz, in cooperation with the Ministry of Fair Trading, modified its system to ensure compliance with the WA legislation.

The manner by which SkyBiz conducts its business is being revisited.

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court in Perth against Kevin Ryan, a participant in a scheme called SkyBiz 2000 Home Based Business.

The contention is that the system involves a pyramid selling arrangement. It would be inappropriate for any journalist or financial commentator to comment on the issue while a legal proceeding is pending.

However, given the issue has resurfaced again it appears that members of the SkyBiz community are still approaching people to recruit new participants.

I have chosen not to participate as I have concerns about the nature of the approaches being made.

This would be a criticism of any business that used such an approach, not just SkyBiz.

The approaches to me have involved some secrecy with information withheld to provide some degree of intrigue as to what the product is.

I was approached by a lady wishing to discuss the business, who, after some questions from me, admitted that she did not even own a computer.

I must say that the concept of a web-based, website selling business being sold by someone who does not even own a computer did provide me with a huge level of intrigue.

The difficulty with any business of this nature is the level of control of the various participants. We have seen any number of multi-level marketing businesses go through a similar gestation period where the “recruiters” to the system exaggerate the level of success that can be achieved by the participants.

It would seem SkyBiz needs to take greater control of the representations that their people are making.

Whether it is a pyramid-selling scheme is something that the Federal Court will decide.

In the meantime, the operators of the business do need to ensure the participants in the system do not exaggerate the level of success that can be achieved.

It would also be good business practice to educate their people in greater depth to ensure that potential recruits achieve a good impression.

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