Consumers Warned of Internet Diamond Pyramid Scheme

The Australian Department of Consumer Protection issued warnings about a pyramid trading scheme involving diamonds being promoted on the internet. The company, calling itself Canadian Diamond Traders (CDT) asks people to invest $100 and to recruit others to join.

The website shows how participants move to the top of the pyramid to acquire $3000 and a diamond. The “10 steps of the trading program” involve terms like Miner, Cutter, Polisher and Collector, and promise “colossal discounts on high quality diamonds” in return for continued deposits of money into the program. Specifics about diamond quality and weight are not available on the site, and there is no discussion regarding how people from outside the diamond industry will be able to market diamonds without some education and knowledge.

Strict international laws govern the trade of diamonds. Australian consumer protection commissioner Patrick Walker says participants risk being prosecuted if they become involved in the scheme. “At this stage, we aware of no-one who has actually participated. But we're very concerned. This is an attractive proposition. It's well designed, it's cleverly marketed - particularly with the lure of a diamond - and we think it could catch on.”