OFT given binding undertakings over online matrix scheme

Internet Business News, August 24, 2005

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Mobiles4all Ltd is reported to have given binding undertakings to the UK's Office of Fair Trading (OFT) that it will not continue to promote its online 'matrix' scheme, offering free hi-tech gadgets in return for the purchase of low-value goods.

The scheme promised that people purchasing items costing GBP20 to GBP35, such as a SIM card or ringtone CD-ROM, would have a chance of acquiring 'free gifts' such as iPods and mobile phones. Purchasers were added to a waiting list with the promise that the gift would be sent once they reached the top of the list. Around 30 new members had to join the scheme and be added to the list in order that a single 'free gift' be despatched. The company claimed to have more than 10,000 customers.

It is understood that members could make further purchases or recruit new members in order to move themselves up the waiting list but the number of members is thought to have far exceeded the 'free gifts' despatched. OFT claimed that the scheme was being run as an unlawful lottery under the Lotteries and Amusements Act, and is reported to have obtained undertakings from Mobiles4all Ltd and the Company Director and Company Secretary that they will not continue or repeat any scheme constituting an unlawful lottery.

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