New Zealand's Best Source of Franchising Information Since 1992

Linkedin Twitter Googleplus Facebook

< FRANCHISE NEWS


Warning - NZ women targetted by 'secret' pyramid scheme

posted on 28th August 2017

The Commerce Commission has issued a warning about women's 'gifting circles' which are no more than a pyramid selling scheme in breach of the Fair Trading Act. Unlike franchising, pyramid selling schemes promise payments for the enrolling of others, rather than sales of a product, and require the constant recruitment of new members - which is ultimately impossible. The latest scam is specifically targetting women in Auckland, Tauranga, Nelson and Golden Bay, and has been described by one victim as a 'spiritually transmitted disease.'


Pyramid schemes are illegal in 46 countries. The Commerce Commission wants to hear from anyone who has been approached recently to join a gifting circle, or anyone who has information that identifies anyone profiting from the scheme. Women operating a circle, or who invite others to join one, may be fined up to $600,000 per offence.


Pyramid selling or network marketing should not be confused with franchising, which is a reputable way of doing business where franchisees own their own business providing goods or services under a common brand. Understand how franchises work and see details from the latest Survey of Franchising.

Women pay a "gift" of US$5000 (NZ$7000) when they start as a seed, before moving on to sapling, then blossom and finally achieve the "Lotus" status to receive a US$40,000 payout from eight new women. If no new members are recruited, the circle can collapse.

A circle document entitled "25 Ways to Manifest Your Gift" encourages new recruits to sell their car, paint a neighbour's house, apply for a credit card or second mortgage, take out a loan or ask for an early inheritance.

The most disturbing is number 18, where they are encouraged to sell their blood or plasma, and even their eggs.

Women sign a document stating the money is "a gift and not an investment" and that they "expect nothing in return".

They receive coaching on how to recruit others and meet several times a week in person or by phone to discuss life, spirituality and personal development.

Read more at https://www.stuff.co.nz/bus...

Back

Free

Shadow

Send for your free copy of our printed magazine, New Zealand's most respected,
comprehensive
guide.


PUTTING PEOPLE in BUSINESS