SYDNEY (08/10/2000) - Thousands of Australians may be customers of Sky Biz.com, a U.S.-based ISP (Internet service provider) accused of pyramid selling. Sky Biz.com is a subsidiary of Hamilton, Bermuda-based Sky Biz International Ltd.
The Australian Competition and Consumer Commission (ACCC) is seeking a court injunction to stop one Perth, Australia, resident from participating in the scheme.
The ACCC believes it falls into the illegal pyramid sales category because of the emphasis Sky Biz places on commissions rather than product. It is the first time the ACCC has taken aim at an ISP for pyramid selling.
In the Sky Biz model, customers who pay $A185 (US$107) for its personalized Web site product need to sign up only two other people to qualify for astronomical commissions.
A Sky Biz marketing video features an Australian identifying himself as Peter who claims his subnetwork alone has signed 790 individuals in the past six months.
He boasts in the video that his weekly income from commissions is approaching $A5,000 and refers to other Australians who have built up similar or larger networks.
Sky Biz may have as many as 30,000 Australian customers if its claims of a 750,000 worldwide customer base are true.
Customers can continue using the Sky Biz product suite even if the company's sales tactics are found to breach Section 61 of the Trade Practices Act, said ACCC regional director Stuart Smith.
However they will not be able to onsell the package and claim commissions.