By Vir B. Lumicao
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| Pricey health supplements are among those sold by MLMs |
Hong Kong authorities are calling on people who have been
asked to put huge sums of money in a network marketing scheme to report to police, saying
these could be classified as pyramiding, which are illegal in the city.
The advice came as a Filipina domestic helper complained in
a social media site about how she was lured into the Wanchai offices of a
networking group on false pretenses, before being offered help to take out a
loan so she could pay their hefty joining fee.
Sources from Immigration and Customs departments said sec 3
of Cap 617 of the Crimes Ordinance provides that a networking scheme may be
classified as a pyramid even if it involves, among other things, the marketing of
goods or services or both; and if a participation payment that is not commensurate to the goods received in exchange is required of a new
recruit.
Moreover, art 5 of the same law provides that both the operators and investors
in a pyramid network are criminally liable. A person who commits an offence under subsection (1) referring to operators; or (2) which pertains to investors, is liable on conviction to a fine of $1,000,000 and to imprisonment for 7 years.
It is often hard to distinguish between a straightforward multi-level marketing (MLM) company and one that is a pyramid scam, so it's best to avoid both.
The FDH related in a post on the Facebook group of DWC Help that
the incident happened on Oct 17, when she asked an older woman for help in
looking for a shop in Wanchai that sold mobile phones
She said the woman whom she called “ate”, offered enthusiastically
to take her to a phone vendor in the area. Instead, the older woman took her to
the office of a Filipino networking company.
Although she did not name the company that was introduced to
her, saying she did not lose money there anyway, some of those who commented
identified it as UNO (Unlimited Network of Opportunities).
That prompted promoters from UNO to immediately come out in
the open to defend the networking business.
The complainant said the recruiter explained what the group
was and promised her big weekly income if she paid a $9,600 joining fee. When
she said she was broke due to obligations at home, the recruiter suggested she
take out a loan from a lending company.
“Ang gusto niyang
mangyari ay maglo-loan ako ng $25,000. Tapos yung $15,000 daw ipadala ko sa
amin at yung $10,000 ipang-member ko. May sukli akong $400,” she said.
(What she wanted me to do was to take out a loan for
$25,000. From that, I was supposed to send $15,000 to my family in the Philippines,
while $10,000 should go to my membership fee. I get to keep the $400 change).
The recruiter reportedly told her she could earn up to $2.8
million because there was already a “downline” for her, that is, a member that
would go under her in the networking ladder.
But the worker said she refused as she had already felt
victimized because she lost precious time listening to the sales spiel.
“Sana kung gusto nyong
tumulong sa kapwa OFW, huwag kayong magsulsol na mangutang yung mga tao. Kasi
lalo nyo silang ibinabaon para lang mag-member sa inyo,” she said.
(I hope that if you really want to help your fellow OFWs you
wouldn’t push them to borrow money (to put in your network). You’re forcing the
person to get mired in debt just to join you).
The worker said the multilevel networking scheme looked
good, but she disliked the “kidnap-style” tactic used by some of its members to
recruit others. “Sa Pinas, kidnap-style
na nga, ganun pa rin dito,” she said.
(They already do it kidnap-style in the Philippines,
they shouldn’t do the same thing here).
Many readers came to her side, alleging similar experiences
with the group.
They decried how they were lured to the firm’s office by
inviting them in for coffee or offering them part-time work. Once inside, they were
all promised help in getting a loan if they didn’t have money to invest in the
scheme.
Some of those who posted comments claimed they were not
allowed to leave until the recruiter had finished their talk.
Many of those who came out in support of the whistle-blower
said they had lost money through the same group or by joining other
pyramid-style networking operations and regretted their mistake.
One worker said the
recruiters would ask, “Matagal ka na dito
sa Hong Kong? May pamilya ka ba sa Pinas. May
utang ka ba? Gusto mong mabayaran kaagad?”
(Have you been in Hong Kong for a long time? Do you have a family in the Philippines? Do
you owe money? Do you want to pay it back quickly).
It turned out the
recruiter just wanted her to take out a loan so she could repay her debt in the
Philippines,
and use the rest of the money to invest in the networking scheme.
The network promoters were quick to respond, saying they were just offering the
helpers a way out of their tight financial situation. They claimed the business
they offered was legitimate and had made millionaires out of hard-working
members.
They also invited the whistle-blower to their office and
identify who the recruiter was.
But their spirited defense of the networking scheme failed
to convince their detractors, who insisted it was a scam as only those at the
top of the pyramid got rich. They accused the group of driving the workers
deeper into debt.
One critic backed this up, saying she had lost money from
one such scheme.
“Mga downline abutin
man ng dekada downline pa rin sila at never na maging millionaire circle po
ayon sa payo ng ng mga upliners na magre-recuit po. 100% tama ang mga linya ko
kasi galing na ako diyan sa networking ng mga yan. Huwag pauuto sa mga freebies
kuno nila,” she said.
(Those downlines will remain downlines even after a decade,
and will never become a millionaire as promised by the upliners that recruited
them. I am 100% sure because I used to be with those networking groups. Don’t
get fooled by their promises of freebies)
