The Commerce Commission has decided not to investigate the Leased Funds Investment Programme. This scheme has received considerable publicity recently after a meeting concerning the scheme was held in MP Owen Jennings' office.
Commission General Manager John Feil said that the Commission has assessed the information it has about this get rich quick scheme and while it does not meet the Commission's criteria to start an investigation under the Fair Trading Act, the Commission believes people contemplating involvement should be very wary.
Under the Act the Commission focuses on issues where there is widespread consumer detriment, where repeated breaches have occurred or where a legal precedent is needed to develop the law. It has ongoing investigations into a number of get rich quick and pyramid schemes.
However, whether or not the Commission investigates a scheme, people should be extremely cautious about claims of high profit rates, big returns for little work or the need for secrecy.
"Our experience is that, even if the promoters are well intentioned, get rich quick schemes do not work," Mr Feil said.
"Before deciding about investing, people should get independent financial and legal advice. Never rely solely on claims made by the promoters or by advisers whom the promoters nominate.
"If the promotion is a scam, then investors are unlikely to get money back because the promoters will take it and run, probably overseas, or they will have spent it, and if it is a legitimate scheme, but it is badly run, then there won't be any money to get back."
The Commission is not a financial or legal adviser and cannot tell people in which schemes they should or should not invest. Its advice about the Leased Funds Investment Programme is the same as it would give about any scheme: people should get independent professional advice before deciding about investing.
"The now frequently used comment, 'if it sounds to good to be true, then it probably is,' applies," Mr Feil said.
"It's your money, be careful what you do with it. If you are investing someone else's money, then be doubly careful."
Media contact: General Manager John Feil
Phone work (04) 498 0963
Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its web site www.comcom.govt.nz
