By IRENE CHAPPLE
The Commerce Commission is investigating suspected pyramid selling company Infinity Concierge.
The commission, tipped off by complaints from the public and the Direct Selling Association, began an investigation into the newly formed company this week.
They are now warning punters not to join, and to seek legal advice before
giving the company money.
Investigators swooped on an Infinity Concierge meeting at the Christchurch Town Hall this week, confiscating company papers and questioning some of the 80-odd participants.
The commission says the scheme is the same as the British Igennex scheme, which has been investigated by the Department of Trade and Industry.
Both are said to create a closed buying circle which gives discounts to members after they have been charged high entry fees. There are also incentives to recruit members.
Membership to Infinity costs $3937.50, although some members are understood to have paid less. More than 100 people have joined since the company was registered on July 9.
About 30 companies are understood to be involved in the scheme.
Deborah Battell, director of the commission's Fair Trading branch, said a pyramid scheme could often be identified if benefits of recruitment were greater than for the product on offer.
Infinity Concierge directors are Christchurch-based Rod McColl and British national Warwick Bryan, who is also the sole shareholder.
McColl became involved in the Igennex scheme when he was on holiday in Britain.
Back home, he helped set up Infinity Concierge with Bryan, who flew into New Zealand this month.
McColl said the company was not a pyramid scheme.
He said Igennex had been cleared by the Department of Trade and Industry, but Battell said the commission understood the investigations were continuing.
McColl said Infinity Concierge "sells the Concierge service and the discount card system". He directed further questions to Bryan, who could not be contacted.
The commission is also investigating Auckland-based Net Guard (New Zealand), which it suspects of being a pyramid scheme. The company has now closed.
Two of the people involved in the Net Guard scheme were associated with Alpha Club, against which the commission has taken civil action.
Running a pyramid scheme carries individual fines of up to $30,000, and is a criminal offence.
