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Pyramid selling slammed: Infinity Concierge fined

Pyramid selling slammed: Infinity Concierge fined over $38,000

The Commerce Commission is warning the public not to get involved in pyramid selling after the Christchurch District Court fined Infinity Concierge and its operators a total of $38,760 including costs for operating or promoting a pyramid selling scheme, in breach of the Fair Trading Act.

Two New Zealanders, Rodney McColl and Kenneth Olorenshaw, were among four men who pleaded guilty to the charges of promoting the British-based international selling organisation. The Commission is continuing its case against a fifth man David John Mawson.

Commission Director of Fair Trading Deborah Battell said the result sent a clear message to anyone operating or promoting a pyramid selling scheme: “Such behaviour is illegal and the Commission will prosecute those involved.”

“Moreover, New Zealanders should not think they are exempt from prosecution for getting involved in the promotion of an overseas based scheme.”

Infinity Concierge offered membership costing $3,500 plus GST to an alleged concierge service. In addition they offered access to a closed buyer group that claimed to receive discounts at various rates from a number of businesses.

Members were also given the opportunity to earn significant remuneration by the recruitment of new members. The latter was given prominent emphasis throughout the invitation-only presentations held in both Christchurch and Auckland last year.

In August, following the execution of a search warrant at a Christchurch meeting, the Commission sought an interim injunction against Infinity Concierge, believing urgent action was required to prevent the company from continuing to recruit new members. The injunction prevented Infinity Concierge from operating or promoting the scheme and effectively froze any money in its bank account.

The Commission continued to investigate the scheme and issued criminal proceeding against the company and individuals involved.

In sentencing, Judge Deobhakta said that while gains made had been modest, that was probably only because of early intervention by the Commission.

Judge Deobhakta also said that the penalties would have been higher against certain individuals were it not for their dire financial circumstances.

Background Infinity Concierge Limited – fined a total of $20,000 on two charges Warwick Gregory Bryan – fined $3,000 on one charge, plus $130 costs Kenneth Roger Olorenshaw – fined $3,000 on one charge, plus $130 costs Samuel Cofi Acquah – fined $7,500 on one charge Rodney Peter McColl – discharged without conviction, $5,000 costs

A bill currently before Parliament would, if enacted, significantly increase the penalties for operating a pyramid scheme. Under the proposed Fair Trading Amendment Act, operators would face penalties of up to $200,000 (for companies) or $60,000 (for individuals). In addition, the courts could fine people up to the value of any commercial gain resulting from the scheme.

-------------------------------- The Commerce Commission recommends some basic precautions to avoid getting drawn in to a pyramid scheme: Be wary when approached to join schemes where there are promises made about future earnings that require people to recruit members to obtain those earnings. Be extremely cautious if you are encouraged to borrow money to join a scheme on promises of easy returns. Always get professional independent advice (for example, from an investment advisor or manager at your local bank, an accountant or a lawyer) before investing money in any scheme. Don’t rely on claims made by the promoters or by people who claim to have made money from the scheme. If it sounds too good to be true, it probably is.

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