• Reports of people participating in another illegal pyramid scheme/gifting circle
• The Commitment Circle is believed to have originated in New Zealand
• The scheme has targeted people in remote Indigenous communities in Australia

People who take part in gifting circles are being warned by Consumer Protection that they could be breaking the law and could face prosecution following reports of another illegal pyramid scheme being promoted in Australia and New Zealand.

The latest pyramid scheme to be uncovered The Commitment Circle, also known as Foundation Gifting and 63K Masterminds, appears to originate in New Zealand where authorities have been notified.

Consumer agencies in Australia, including Consumer Protection, have received dozens of enquiries about these schemes which seem to target Indigenous residents in remote communities in Queensland and New South Wales, among others.

Participants are usually recruited to join the pyramid scheme through family or friends and are directed to view a video on YouTube and also receive images which outline how the scheme works, with promises that those who join will earn $AUD63,000 in just four weeks.

After paying a $US400 joining fee, new recruits are told that they will receive $US800 in the first week but they need to re-gift $US500 of that and keep $US300. In the second week, they will receive $US4,000 and must re-gift $US2,500. In the third week, they receive $US20,000 and re-gift $US6,000 and, in the final fourth week, they will receive $US48,000 but don’t need to re-gift any of it.

In April 2019, a warning was issued about a pyramid scheme that was pretending to be a women’s spiritual support group and involved participants in WA’s South West: Illegal pyramid scheme masquerades as a women’s support network (Gifting Mandala) It followed a warning about a similar scheme in June 2018: Women’s spiritual group identified as an illegal pyramid scheme (A Living Workshop)

Commissioner for Consumer Protection Lanie Chopping said that the illegal pyramid schemes are dressed up to look legitimate.

“These schemes are often shrouded in secrecy, promote a feeling of generosity and sometimes involve spirituality, with participants being made to think they are doing something good and will profit from it at the same time,” Ms Chopping said.

“All pyramid schemes rely on a constant recruitment of new people and, the longer it goes on, the greater risk of it collapsing and those on lower levels losing out.

“Because of the secrecy and the reluctance of those reporting to us to dob in their family or friends, it’s difficult to find the original promoters, but that doesn’t stop us from trying as the originators are usually the ones who profit the most.

“We remind people that it’s not just the organisers who face prosecution, it’s also illegal to participate in pyramid schemes at any level. We recommend that, if approached to join any ‘gifting circles’, as tempting as it may seem, just say no and report it to us.

“People who have useful information as part of our investigation into this and other schemes can safely come forward without fear of prosecution.”

Anyone with information about gifting circles or other pyramid schemes is urged to contact Consumer Protection by email consumer@demirs.wa.gov.au or call 1300 30 40 54. More information on pyramid schemes is available on the Consumer Protection website.

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Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / alan.hynd@demirs.wa.gov.au  

The Commitment Circle - payment system

The Commitment Circle - weekly payments