How the Commerce Commission works for you

With news breaking earlier this week of the prosecution of scammer Shelley Cullen, who was convicted for her involvement in one of the country’s most notorious pyramid schemes, the Commerce Commission (CommComm) is warning people to be extra vigilant about the tricks such people use.

To break down this recent prosecution as well as other issues related to consumer rights, Associate Commissioner Joseph Liava’a joined Levi Matautia-Morgan on 531pi's Pacific Mornings.

He says one way to summarise what CommComm does is that it's about "making New Zealanders better off”.

A longer explanation is that the Commerce Commission is an Independent Crown Entity which carries out the enforcement of laws or regulatory control related to fair trading, competition, consumer borrowing, and preventing misleading behaviour by businesses.

Liava’a, who's role is in the consumer division says: "We cover things like prosecuting people who are engaged in things like pyramid schemes and scams like that."

And he is particularly keen on education people how to recognise scams, which can be easy to miss when people are in desperate need of money.

He says there are three questions people should ask themselves;

• Do I have to make a payment to partake in this opportunity?

• Do I have to recruit other people in order to get rewarded?

• and, is recruitment rather than selling services or products the predominant way of making money?

He says if you are answering yes to any of these questions, it is possible you're entering or involved in a pyramid scheme.

Pyramid schemes are actually illegal in Aotearoa under the Fair Trading Act 1986 and gimmicky cash flow trends really took flight during the Covid-19 pandemic, particularly at the height of lockdowns and job losses in 2020-2022.

Liava’a adds that vulnerable people in tight-knit Pacific communities are also easy targets.

"Pyramid schemes seem to take root and really flourish in communities that are well networked, and communities that are just trying to get ahead and work together.

"They [the scammers] really prey on people’s hopes and dreams."

With Cullen's recent conviction, it is another reminder for people to be extra wary.

In a statement released 23 April it says, “The Commerce Commission is warning consumers about the risks and increasing sophistication of pyramid schemes, following the conviction of the lead New Zealand promoter of one of the biggest pyramid schemes the Commission has seen promoted in New Zealand.”

Adding that the pyramid scheme in question, Lion’s Share, was responsible for approximately 150,000 participants worldwide losing a total of almost $NZD17 million.

The Commission’s website includes a fact sheet to help people spot a pyramid scheme, as well as general information about scams. Those who promote pyramid schemes, including to their family and friends, run the risk of criminal convictions and substantial fines under the Fair Trading Act.

Watch the full interview with Joseph Liava’a below.