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'Gifting circles' prompt warning

NZ Newswire logoNZ Newswire 3/12/2016 Daniel Gilhooly

<span style="font-size:13px;">Mt Maunganui woman Soreya James the circles are not pyramid schemes because there is no hierarchy</span> © facebook Mt Maunganui woman Soreya James the circles are not pyramid schemes because there is no hierarchy The competition watchdog is warning New Zealanders against joining women's "gifting circles", where members pay thousands to join for friendship and spiritual guidance but could lose their cash.

The Commerce Commission says it isn't investigating any local cases of the circles, which first emerged in North America and reported to have operated as pyramid schemes, but it is aware of at least one here with a $5000 entrance fee.

They did not appear to be common or widespread, says competition general manager Antonia Horrocks.

"However, we strongly advise New Zealanders not join up," she said in a statement.

"Hallmarks of pyramid schemes are that they require continued recruitment of new members, who have to pay to join, and there is an expectation members will eventually profit from being involved."

The schemes would collapse and those at the bottom would lose their money, Ms Horrocks said.

Anyone running or promoting a pyramid scheme could be prosecuted, she said.

However, Mt Maunganui woman Soreya James the circles are not pyramid schemes because there is no hierarchy.

She joined a circle three years ago and had completed five circles herself since, she told Fairfax.

She had received less than $100,000 from them, which she used to support her family.

"This supports women to live a much more abundant lifestyle and still do what they love to do - write their books or create their music."

Fairfax reported about 100 New Zealand women had been conscripted into circles. Some were able to live off the proceeds but some had lost thousands of dollars.

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