Commerce Commission probes potential Hawke’s Bay-based pyramid scheme LiveGood
The Commerce Commission is investigating a potential Hawke’s Bay-based pyramid scheme involving health supplements platform LiveGood.
The scheme, which promotes an “affiliate compensation plan”, involves several social media groups which market through Facebook, Instagram and TikTok.
When joined, participants are added to groups including Freedom Lifestyle Revolution, The Official Diamond Rush, and other New Zealand-based Facebook groups linked to the scheme.
Commerce Commission deputy chair Anne Callinan said the scheme carries the hallmarks of a pyramid scheme – scams designed so individuals primarily make money through the continuous recruitment of others, rather than through the sale of genuine products or services.
“While the investigation is in its early stages, we believe we have a duty to publicise this potentially illegal scheme so Kiwis are aware of the risk of becoming involved,” Callinan said.
“It is important that any potential harm is limited.”
The commission said the scheme has relatively low-cost joining fees, meaning many participants have multiple memberships.
“It is crucial people do their due diligence before becoming involved in schemes of this nature – if something seems too good to be true, there’s a good chance it is,” Callinan said.
The commission also issued a warning about a Wellington-based scheme encouraging people to invest in cryptocurrency investment trading platforms, informing them they will receive a significant return on investment.
While the commission said that in its interim view it did not believe the scheme was a pyramid scheme, it had received concerns about it.
The scheme originates internationally and was initially known as TXEX, but has several other names, including: UICEX, CR GLOBAL, Signal Trader, BG Wealth Sharing Group and DSJ EX.
“Schemes present themselves in different forms, with different investment requirements and methods of promotion. These schemes entice people by promising high returns quickly and an opportunity to create ongoing wealth, which is typical of these scams,” Callinan said.