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Commerce Commission warns women involved with Women's Gifting Circle

04 September 2019

The Commerce Commission says it has warned four women for likely breaching the law by promoting and operating a pyramid scheme in New Zealand.

It says Women’s Gifting Circles originated in the United States and Bali, and it considers that they are likely to be illegal pyramid schemes.

"Individuals typically join the scheme after being invited by a trusted friend or family member. They are asked to pay a 'gift' of around US$5,000 in return for empowerment, wisdom and sisterhood and the promise of US$40,000 should they reach the circle’s top status of leader or 'Lotus'.

"The scheme involves the continual recruitment of new members to join and pay gifts in order to fill a circle’s 15-person structure and allow for the formation of new circles," the Commerce Commission says.

“The Commission considers that the Women’s Gifting Circle is likely to be a pyramid scheme operating under the guise of a personal growth network. Promoting a pyramid scheme is specifically prohibited by the Fair Trading Act because these schemes commonly mislead about the likely financial rewards of membership. Pyramid schemes require constant recruitment of new members to buy in and inevitably people lose out financially as recruitment dries up, and in this scenario, the circle collapses. This can often have significant financial impacts on the lives of individuals involved,” says Commissioner Anna Rawlings. 

More than 200 letters will also be issued to other members of the Women’s Gifting Circle, advising them of the Commission’s warnings.

“We consider these circles to be scams and would urge any person who may find themselves associated with them to take the Commission’s concern with Women’s Gifting Circle seriously, and to stop any ongoing involvement immediately,” Ms Rawlings says.

Last updated on the 16th September 2019