Court rules pyramid scheme must pay back investor’s money, but legal battle continues

As legal authorities warn of the dangers of bogus financial schemes, an Auckland woman has managed to recover some of the money she lost through the courts.

The Disputes Tribunal ordered Mele Hea to pay Tionly Fatukala $18,000 she invested in a pyramid scheme.

However, only $8000 has been repaid and Fatukala is taking Hea to court in February to recover the remaining money.

Tionly Fatukala wants the money she invested into the scheme back. Photo / Facebook

Hea promised Fatukala a three-fold return for her investment. Details of how this was going to happen were vague and it was described as a “gifting programme.”

Fatukala asked the Disputes Tribunal  to order Hea to pay back the amount she was promised, but the court declined, arguing that pyramid selling schemes were inherently unfair and that most people involved were likely to lose money.

In April last year the Commerce Commission issued a warning to the Pacific Island community in Auckland after it noticed a marked increase in the number of pyramid schemes targeting them.

It said some suspected pyramid schemes appeared to be targeting the Tongan community. Pacific communities were the most commonly mentioned group to be affected by pyramid schemes.

Hea was reported by the New Zealand Herald as saying that she did not know what she was doing was illegal.

“If I’d known it was a pyramid scheme I wouldn’t have done it,” she said.

She claimed to have paid back Fatukala about $15,000 and has appealed against the Disputes Tribunal’s ruling that she still owes closer to $10,000.

Mela Hea said she stopped running the scheme when she found out the damage it was doing. Photo / Facebook

She said she could not afford to pay everyone who had demanded a refund.

“If I pay one person a refund, I have to pay all people a refund,” she said.

As Kaniva News reported earlier this week, New Zealand and Australian financial authorities have warned people not to have anything to do with pyramid schemes, with Validus identified as a key concern.

The Commerce Commission said it would continue to assess any information regarding Validus or any other suspected pyramid schemes.

When Kaniva News exposed Validus’s activities in September, we reported that the New Zealand Financial Markets Authority had warned people not to trade or invest with the company.

We also reported that the Tongan community had already been affected by scams, including pyramid schemes in which people have lost hundreds of thousands of dollars.

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