Pyramid selling schemes are prohibited under the Fair Trading Act 1986. The Commission is currently investigating the Lion’s Share scheme and Ms Cullen’s promotion of it and other potential pyramid selling schemes.

The letter requests Ms Cullen to:

  • cease association with the Lion’s Share scheme and any other pyramid scheme
  • cease promoting and recruiting additional participants into the scheme or any other pyramid scheme
  • remove any content from social media (including Facebook and YouTube) that promotes such schemes.

On receiving the Stop Now letter Ms Cullen has confirmed to the Commission that she has stopped promoting Lion’s Share.

The Commission’s investigation is ongoing. However, because it considers that the Lion’s Share scheme is likely a pyramid scheme, the Commission advises any individuals already involved with the Lion’s Share scheme to cease their involvement and those considering joining the Lion’s Share scheme are advised not to do so.

Preventing harm from pyramid schemes is a current priority for the Commission. The schemes require constant recruitment of new members to buy in and inevitably people lose out financially as recruitment dries up.

As this is an open investigation the Commission will make no further comment at this time and will not provide interviews.

Background

Pyramid schemes

Pyramid schemes are illegal under the Fair Trading Act 1986. They can take many forms but have the following essential elements:

  • they offer a financial return based on the payments made by new recruits
  • the return is dependent primarily on the continued recruitment of new members, not sales of a product or service.

Stop Now letters

A Stop Now letter is issued where we urgently want conduct to stop that we consider likely to be harmful to the market, consumers or public safety, and which is a likely breach of one of the laws that we enforce.

It gives the recipient early warning of our concerns and a chance to change their behaviour. It does not signal that we will not also take enforcement action.

If the letter does not achieve a prompt end to the conduct, we may seek a Court injunction, requiring a party to stop what they are doing.