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Commerce Commission warns four women for operating pyramid scheme

12 September 2019

The Commerce Commission has warned four women for likely breaches of the Fair Trading Act 1986. The women have been promoting and operating a probable pyramid scheme in New Zealand.

The so-called ‘Women’s Gifting Circles’ originated in the US and Bali. Women are invited by a friend or family member to pay a gift of US$5000 in return for empowerment, wisdom and sisterhood. The women are promised US$40,000 if they reach the circle’s top status of leader or “Lotus”.

Commission Chair Anna Rawlings said that the Women’s Gifting Circle is likely to be a pyramid scheme and is therefore specifically prohibited by the Fair Trading Act 1986 because these schemes commonly mislead about the financial rewards of membership.  The essential elements of a pyramid scheme are that it offers a financial return based on payments made by new recruits and that the return is dependent primarily on the continued recruitment of new members, not sales of a product or service.

The Commerce Commission considers the circles to be scams and urge any person associated with them to stop ongoing involvement immediately. Any person found to be promoting or operating a pyramid scheme in breach the Fair Trading Act could be subject to criminal conviction and a fine of up to $600,000 per offence.

Last updated on the 12th September 2019