RACHEL CLAYTON

Last updated14:09, July 14 2017

MARTIN DE RUYTER/FAIRFAX NZ

Fran Halford of Nelson talks about why she is speaking out about Circle.

New Zealander womenarelosing thousands of dollars to illegal pyramid schemesthat promise spiritual enlightenment.

The Commerce Commission started investigating women's giftingcircles after receivingcomplaints in 2016 and now considers them to be illegal pyramid schemes in breach of the Fair Trading Act.

Anumber of circles were set up over the past three years and the Commission said somemay still be active.

The circles originated in the United Statesand Bali and women typically join the scheme after being invited by a trusted friend or family member.

READ MORE:High-flying women lose money in secret spiritual movement with 'hallmarks of pyramid scheme'

Leadersinvite women to make a one-off gift, usually of $7000, in return for empowerment, wisdom and sisterhood and the promise of $56,000 should they achievethe "Lotus" status. When eight women are recruited the leader of the groupcan take the entire cash gift.If they are unable to recruit others the groups cancollapse.

Commission head of investigations Ritchie Hutton said the circles appear to have affected communities in Nelson, Tauranga and West Auckland.

MARTIN DE RUYTER/STUFF

Fran Halford, a Nelson doctor, spoke out about the Lotus women's gifting circles last year and likened them to a pyramid scheme.

"We consider the circles to be scamsand likely to breach the Fair Trading Act. Women operating a circle or who invite others to join one may be committing a crime and could be fined up to $600,000 per offence. If you are approached to join a circle, don't. If you are already in a circle, you should leave and not encourage anyone else to join," he said.

"Like all pyramid schemes, this one requires the constant recruitment of new members to buy in and inevitably people get burned as new recruits dry up and the circle collapses," he said.

"These circles try to mask the insidious nature of their existence by requiring new members to sign a document saying they are 'gifting' the $7000 joining fee and expect nothing in return, while still promising a $56,000 pay-out if they reach the top of the circle as 'Lotus'.

Last year, Fran Halford spoke out against the circles after being coaxed into joining one.

She said the circles were spreading "a spiritually-transmitted disease".

The Nelson doctor was told she would enter a circle as a Seed,then move on to Sapling, then Blossom and finally be a Lotus herself to receive her gift of NZ$56,000from eight new women, pluscoaching and sisterly support on the weekly group calls online.

Halford was urged to keep it private, especially from men, and told not to read anything online about the circles.

"They had this evangelical glow and chased me hard. I trusted them," she said.

The Commission wants to hear from anyone who has been approached recently to join a circle, or anyone who has information that identifies a 'Lotus' profiting from the scheme.

-Stuff

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Commerce Commission warns against Gifting Circle pyramid scheme - Stuff.co.nz