• Robyn McDonald
Consumer Affairs

The Minister of Consumer Affairs, Hon Robyn McDonald, today welcomed the timely release from the Commerce Commission of the "Pyramid Selling" publication which provides guidelines about pyramid selling schemes for consumers.

"It is an unfortunate fact that too many New Zealanders are tempted to get involved in a scheme which promises an income of thousands of dollars for only a few dollars investment," said Mrs McDonald.

"It is very important that New Zealand consumers know how to identify the hallmarks of such illegal schemes and this publication will help.

"Every year, the Ministry of Consumer Affairs receives many calls from members of the public about the legitimacy of get-rich-quick schemes and whether they should enter the scheme.

"Many of these schemes may be little more than scams where the participant is encouraged to send money away to blind box numbers with the lure that they will receive thousands of dollars in return.

"Often the number of people needed to be recruited into the scheme to provide the return on investment will quickly exceed New Zealand's population," the Minister said.

"New Zealand consumers need to know that pyramid selling is prohibited under the Fair Trading Act. With this new publication, New Zealanders can use a clear question and answer "Checking out the Scheme" guideline as to whether the scheme they may be considering is legitimate.

"Warning signs to look out for include:

unrealistic earnings eg: make a $100,000 a month legally;
are the products being sold with the scheme commercially viable
testimonials from people who do not appear to be available for possible checking eg: RS of Auckland.
"Some schemes even state that they are not pyramid selling and that they have the approval of agencies such as the Ministry of Consumer Affairs. The Ministry does not endorse, or approve any scheme, product or service.

"I urge New Zealanders to take notice of the warnings about pyramid selling schemes and avoid being ripped off. This new booklet will be very useful reading," concluded the Minister.