A pyramid selling scheme is one in which goods or services are sold and the participants in the scheme receive payment or other benefit for introducing other people into the scheme as new participants. As each new participant is introduced to the scheme, the original participant moves further up the 'pyramid' and, depending upon the rules of the scheme, ultimately receives some payment or benefit, usually consisting of a contribution from each new participant. As there is usually a practical limit on the number of people willing to participate in the scheme, it is usually those who join the scheme at the start who receive some benefit whereas those joining at a later stage often have to make a payment but receive no benefit in return.

Under the Competition and Consumer Act 2010 (Cth) [Schedule 2 s 44] it is an offence to participate in or promote a pyramid scheme. The maximum pecuniary penalty (fine) that may be imposed is $2.5 million for an individual [Competition and Consumer Act 2010 (Cth) Schedule 2 s 224]. For a corporation, the maximum fine that may be imposed is the greater of: