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Pyramid Selling

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Pyramid selling might seem an easy way to make money if you are first in and there are a lot of "mugs" and fools around.  But it is a fool's game and is very much against the law. 

You need to know just how the law on such schemes can be broken.  Read the full text below.

We provide you with a direct link to the relevant part of the Website for the Ministry of Consumer Affairs.  Just click on :


.  .  .  Ministry of Consumer Affairs.


You should also check out the Scam Watch section ot the Ministry's Website. Just click on :


.  .  .  Scam Watch  -  Ministry of Justice


Pyramid selling schemes are illegal in New Zealand under the Fair Trading act 1986.

The nasty little trick with these schemes is that the method of earning money depends mainly on recruiting more people, rather than through selling goods or services. Don’t be conned with smooth talking salespersons.

With most pyramid schemes there is a substantial joining fee. It is very unlikely that you will be able to make enough money through the scheme to cover your initial joining fee.

Generally the schemes do not work because the market of potential members is simply too small. For example, in a scheme in which you need to recruit 10 people ( who in turn each need to recruit 10 people ), there would need to be one million members by the time the scheme reached the sixth level.

Under the Fair Trading Act 1986 it is an offence to promote or operate a pyramid selling scheme.

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Feedback/Blogs/Reviews from related topic: Advertising - False and Misleading
"Membership No 186685
I have been unable to acquire any case law in regards to bankruptcy. I am thge alleged defendant in the matter and have opposed the application for bankruptcy as I am not the defendant. The case is now at the stage of the high court requiring a synopsis under 251a, I wish to make submissions in not being notified of the hearing at the district court after the notice of proceeding was served. The matter then got judgement without my knowledge and is now before the high court for bankruptcy. Please advise the procedure to locate any supportive case law that may assist with my application to set aside the bankrupcy claim.

Kindest Regards
I "

"You will certainly get a rehearing if you were not notified but, if you simply misread the documents you were originally served with then you could be in trouble. You must actively follow up on your obligation to file and serve a defence and not just wait for the Court to come to you. Good luck . . . Netlaw "
"Likewise . . . very helpful. Thanks. Gerald - May 2007 - Tauranga"
"Received notice from a creditors lawyer that they wish to put in companiy into liquidation and I have up to today upon receiving their letter. A Statory Demand was intially sent on 7 Aril 2008, which I reponded with a reply explaining that an arrangement (verbal) had been entered in by both parties which was to continue supply, once company got post dated cheques, company stopped surpply and but still continued to present cheques which was not the agreement which was entred into.
What position does that leave me if I want to legal challenge this. Without causing me excessive expresses.


Netlaw responds: If you say that they cannot properly sue because there was a new agreement for time payment, then you can apply for an injunction saying that the Statutory Demand Notice is wrong. But it will cost you. An injunction should not be done without legal advice. Type up a Statement setting out precisiely all the facts as you know them and see a lawyer as soon as possible. A letter shouid be sent to the other side saying how inappropriate the Demand procedure is when the subsequent agreement between the parties was made and kept by you. But you must get your facts right!"

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"I found this interesting. I want to sue for punitive damages and I was interested to learn that our courts are pretty conservative. I think the Welfare have quite wrongly taken my kids and I have found out that the affidavit they gave to a Judge to get an order to uplift them was known to the Welfare to be incorrect. They told the Judge that I had drug convictions but when I found out 5 months ago that they thought that I proved then to them that this was untrue yet I have now found that they have still put this false evidence in an affidavit. But they have also told other people about my "drug convictions". You have to watch these people. (name witheld) - May 2007"
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"The fact examples or samples really helped me. Your topic also gave me confidence to speak up for myself. My case was a simple car accident but the other driver wouldn't pay and my lawyer was going to charge me $700 just to help. Netlaw allowed me successfully to "go it alone". Thanks. Thanks. I am on to making my own will now. Miriam (and hubbie)"
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