Question:
Have you heard of the Business Club/Holiday by RCI/Beekman Brothers. It seems to be like a pyramid scheme. You have to get other people to join for you to make money but I think to make it legal they give you one week's timeshare.

My sister joined months ago and paid a lot of money and now she cannot find anybody to join, so it looks like she has lost her money. But as they will say, at least she got one week's free timeshare. However, is this legal?

Answer:
I contacted RCI and although they are aware of the holiday club and the business club they are not a part of it. RCI simply administers the points swapping for members.

It works like this: once you buy timeshare or points from an independent developer or marketer, you would then be enrolled as a member with RCI, usually for a period of three years, depending on the nature of the affiliation agreement between the developer and RCI, but that is the most common time frame.

Having RCI membership allows one to exchange one's timeshare or points for a holiday locally or internationally, depending on the value of one's ownership. Essentially, they are a vacation brokerage service, and their core business is facilitating exchanges for members.

It seems that 'The Holiday Club', which is in the business of selling timeshare, uses the business club to market their products via network marketing. In other words, they get members of the public who have bought timeshare to invite their friends to a ?hard sell? seminar and if the friend buys then they will earn commission off that sale.

As there is an actual product involved it cannot be called a pyramid scheme. It appears to be legal and they have gone to the trouble of procuring a letter from the Department of Trade and Industry to confirm that it is not a pyramid scheme.

However, I have many misgivings about this kind of marketing. Network marketing is not for the faint-hearted, but while many network marketing organisations tell you it is easy money; it is not.

People have to work hard to earn money (as your sister has learned) and they also risk alienating their friends and family in the process. The only way for your sister to get out of the deal is to appeal to their better natures, but in my experience better natures are sadly absent when it means returning the cash. This is what you will have to call the school of hard knocks, I?m afraid. If your sister has a conscience she will find it hard to put her friends in the same position.