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Nation launches crackdown on pyramid selling

(Xinhua)
Updated: 2006-09-21 11:31

The State Administration for Industry and Commerce (SAIC) of China has launched a one-year-long nationwide crackdown on pyramid selling in collaboration with the Ministry of Public Security.

The crackdown will mainly focus on Guangxi, Guangdong, Shandong, Henan and 10 others regions where pyramid selling is particularly rampant, a SAIC spokesperson said here Wednesday.

The campaign will particularly target organizations engaged in cross-regional pyramid selling, the recruitment of students into such activities, and organizations that misrepresent reality to recruit their members, accommodate them in dormitories and force them to engage in pyramid selling, the spokesperson said.

Pyramid selling was outlawed in China in 1988. Years of crackdown, however, have failed to completely weed out the evil.

Having set up better organizations that are harder to penetrate, pyramid sellers are well disguised and highly intelligent. Many of them conduct business on the Internet and others disguise their illegal activities as chain stores, the spokesperson said.

In some cases, a pyramid selling organization may have thousands or even tens of thousands of members, with a turnover of more than 1 billion yuan (US$126 million), said the spokesperson.

In the first eight months of the year, Chinese authorities investigated 2,441 pyramid selling cases, taking as many as 420,000 people out of the illegal workforce.

A total of 1,325 persons were prosecuted or convicted in 199 cases, the spokesperson said.