Students caught in pyramid selling trap
(chinadaily.com.cn)
Updated: 2004-07-08 10:02

Following the demolition of an illegal pyramid marketing network in Chongqing, the Ministry of Education is to regularize the job market and improve career education, in order to prevent university students from falling into these money traps.

Police and market law enforcers smashed a pyramid selling ring in central China's Henan Province on October 11, 2003. [newsphoto]

Recently, illegal pyramid selling has become quite a problem in Chongqing, Guangdong Province and Liaoning Province. It has found that a large number of pyramid selling participants in recent cases were university students or graduates who were desperate to find a job. In the network of Chongqing, for example, some 2,000 college students were involved.

"Illegal pyramid marketing is not a job, nor a business, it is merely a cheating activity," said an official of the Ministry of Education. "It is very dangerous for such activity to penetrate into schools as it can provide a wrong concept about money and the way to succeed to youngsters, thus harming their mental growth and destabilizing the society."

In order to tackle the problem, the Ministry of Education has issued notices on the employment information network for college graduates to raise their awareness about such illegal activities and their tricks.

Tricks revealed

According to the description of the victims, some tricks, commonly used in the pyramid marketing organizations, are to brainwash the participants, make them believe they can have a chance to get rich within months by paying 3,800 yuan (about US$460).

First, the contact person is usually somebody you know, probably a friend, a classmate, or a colleague, and would then claim that there is a chance of job interview or a high-paid temporary job. They would usually greet you very passionately with travels and parties to give you a very good first impression.

Police and market law enforcers jointly smashed a pyramid selling ring in east China's Anhui Province on March 24, 2004. In a room about 15 square meters, more than 10 were squeezed to live in. The operation helped rescue 100 participants from falling further down into the money trap. [newsphoto]

In some meetings afterwards, eloquent lecturers of the "company" would negate everything you have done in the past and then implant their own "success theory" to your mind through their well-planned speech: studying and working hard would finally end in failure while the only way to "success" is to become an opportunist and to grasp every chance to get rich.

Moreover, the illegal pyramid marketing organizations would disguise themselves as doing "legal direct sales" by having a symbolic product like cosmetics, perfumes, or health products. In fact, these products may never appear in the sight of the participants, and no product is ever sold in the profit-making process; above all, they are usually of low-quality and do not worth that sum of money paid.

In addition, intense "trainings" are very common. Besides frequent public speaking exercises to improve the participants' eloquence, people are also required to sleep on the floor and eat the leftovers of the others in order to instill a "strong will" among them.

Last but not least, there is always a thrid-person to monitor the participants' psychology. They would chat regularly with the participants to prevent any disbelief in their mind; on the other hand, they require the participants to support the "company" unconditionally.

At the end of the day, it is reported that more than 80 per cent of the invited students willingly paid some 3,000 yuan in a few days to become members of the marketing chain.

Illegal detention

While many youngsters are lured and brainwashed by the potential high return and the chance to "start a business", some find themselves under the control of local mafias and unable to pull away.

A market law enforcer shows the shoddy and poor-quality products involved the pyramid selling in Jinan, Shandong Province. [newsphoto]

Pingping (not her real name) is a final-year student of one university in a northeast China province; as desperate as a normal graduate for a job, she was flattered when a friend informed her in February that there was a chance to work as a garden designer in Shaoguan, Guangdong Province.

However, during the "job interview", the interviewer told her that the job nature was going to be changed, and immediately, Pingping knew that it was in fact illegal pyramid marketing and requested to leave, yet things did not go smooth.

The staff of the "company" did not let her go but kept her in a house instead. She was forced to go to different kinds of "trainings" everyday in which some "seniors" induced her to pay some 3,000 yuan and join them.

Insisted not to pay a penny, Pingping had her mobile phone and travel documents seized; she was also not allowed to step out from the house since then.

Although Pingping was finally saved by local police when those people attempted to move her from Shaoguan to Guangzhou, the whole detention lasted for 20 days.

Reasons behind

Experts pointed out that wrong expectation and attitude on money are the main reasons why so many students quit school voluntarily to join illegal pyramid marketing activities.

Due to the poor background of many students, it is understandable that those youngsters become money-oriented and focus on short-term benefits, said Lin Shanyuan, an official in charge of student affairs in China University of Geosciences .

Besides, he noticed that many of the students who participate in illegal pyramid marketing activities have poor interpersonal relationship; therefore, they are more prone to enjoy the illusion of success provided by the illegal pyramid marketing organizations.

After all, those organizations usually exert strong control over the participants. Once agreeing to join the marketing chain, participants have to hand in their identity card, cash, communication tools to the "company" and work there everyday; therefore, it is practically very difficult for them to quit.

Government reaction

Premier Wen Jiabao has expressed his concern over illegal pyramid marketing and has ordered local governmental departments and schools to cooperate to prevent students from falling into the traps.

The Ministry of Education is working with the police force and the labour department on promotional materials for university students about illegal pyramid marketing activities and their detriments.

Besides, high schools and universities are required to improve career education for students, so as to provide a correct value for them and increase their ability to resist temptation. Qualification of the recruitment units in the job market would also be verified.

However, officials from the Ministry of Education do realize the difficulty in fighting against illegal pyramid marketing due to its fliudity and underground nature.

Insiders believe that the introduction of law regulating direct sales this September can provide clearer definiton on what is legal and what is not in marketing methods and thus can help combating illegal pyramid marketing activities.

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