The new penalty, of up to two years in jail, will now apply to more than just the promoters. For the first time everyone who joins and attempts to recruit others will also be committing a criminal offence.
The new rules - enshrined in the new Trading Schemes Regulations and due to come into force on Thursday - aim to stop "money circulation" schemes of the type that have sparked violent demonstrations in Albania this year.
Such schemes - which usually promise fantastic returns - inevitably collapse as new recruits run out faster than investors are paid off.
Until now, fair trading laws have only regulated pyramid schemes with a product to sell. To shut down money-only schemes, regulators at the Department of Trade and Industry have had to resort to more cumbersome companies legislation and the courts.
And now, by making it a blanket criminal offence to recruit to such schemes, they hope to halt operations in the UK even if the promoters remain at arm's length offshore.
"If you operate from outside, you still need people over here. The new Fair Trading Act introduces a criminal offence straight away," one government official said.
The DTI is currently understood to be concerned that directors of the banned Alchemy UK scheme are operating a new scam from a base in Amsterdam.
Alchemy was closed down in June 1994 after taking pounds 3m from 8,000 gullible punters. Members paid pounds 250 up front, then a further 24 monthly payments of pounds 75, with the mouth-watering prospect of receiving pounds 31,775 back, plus bonuses for attracting new recruits.
In the last three years the DTI has closed 18 such operations - also known as "Ponzi schemes" after Charles Ponzi, a US con artist who fleeced gullible Americans of millions in the 1920s.
Titan Business Club, one of the latest, took pounds 17m from over 11,000 recruits at revivalist, cult-like meetings before being closed down as an illegal lottery last year.
Members paid pounds 3,000 to join with the promise of huge returns for recruiting others, an operation the Court of Appeal called "evil and pernicious".
Titan has resurfaced in various guises since and this weekend the DTI declined to comment on any possible action against its founder Peter Reece.
It also declined to comment on any moves planned against recent Titan look-a-likes, including Team Management UK and Freedom International.
However, the DTI dismissed Mr Reece's claims that schemes legal in other European Union countries were immune in the UK under EU law.
The latest anarchy in Tirana, where thousands have been fleeced, has sent apologists scurrying for cover.
"They've all gone quiet since Albania," one government source said.
The new rules will also fine-tune regulation of legitimate multi-level marketing schemes such as that operated by Amway and Cabouchon, the costume jewellery firm.Reuse content