Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Promoter fined $4,500 for multi-level selling

Promoter fined $4,500 for involvement in SkyBiz multi-level selling scheme

Gregory Ian Dawson was fined $4,500 plus $1630 costs in the Auckland District Court on Friday having pleaded guilty to breaching the Fair Trading Act in relation to his involvement in US-based international multi-level selling scheme SkyBiz between 1999 and 2001.

The prosecution, brought by the Commerce Commission, comes hot on the heels of the Commission’s recent successful prosecution of pyramid scheme Infinity Concierge and its promoters.

The SkyBiz scheme involved the sale of website programmes or ‘WebPaks’, for US$100 per year, plus a one-off US$25 establishment fee. Individuals were recruited over the internet to promote the purchase of these WebPaks, with the lure of vast profits.

New recruits to the scheme were required to sell WebPaks to at least two others in order to qualify to receive compensation. However, further down line sales of at least nine WebPaks were required before the recruit was eligible to receive any of this compensation.

Director of Fair Trading Deborah Battell said that the Commission decided to take action against Dawson as he had been identified as being one of the major participants and promoters in New Zealand of what was a now defunct US-based company.

“The Federal Trade Commission in the United States stopped SkyBiz from operating and the company subsequently ceased operations in March last year. Other court action against the promoters of SkyBiz has been taken in both Australia and Canada,” she said.

Background Earlier this month, 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. A fifth man, David John Mawson, will be sentenced on Thursday 10 April in the Christchurch District Court. -------------------------------- 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 consider getting 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 isn’t true.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news