A contingent transaction is the advertisement for sale, lease or rent, or the actual sale, lease or rental of any merchandise, service or rights or privileges at a price or with a rebate or payment or other consideration to the purchaser which is contingent upon the procurement of prospective customers procured by the purchaser, or the procurement of sales, leases or rentals of merchandise, services, rights or privileges to other persons procured by the purchaser. State law declares contingent transactions as unlawful, rendering any obligation incurred by the buyer completely null and void.
The most common contingent transaction is “THE PYRAMID.” The basic scenario is the recruitment of new contributors, rather than the proper investment of funds or sale of goods and services.The weakness in any pyramid is the numerical impossibility of it running out of people.The pyramid’s whole objective is to find investors in order to move up the ladder. Pyramids are easy to spot if no product or service is involved. Pyramid schemes are illegal in Connecticut.
Contact: Office of Attorney General
Phone: (860) 808-5400
Also see Multi-Level Marketing