System targets angry poor

PUBLISHED : Wednesday, 11 July, 2012, 12:00am
UPDATED : Wednesday, 11 July, 2012, 12:00am


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'The so-called efficient franchise system, which they claim is similar to the one used by McDonald's, is an absolute scam,' said Angela Zhang, a former DCHL distributor who invested more than HK$67,000 in December to become a 'count' level distributor.

'It is just an elaborate hoax, teaching senior distributors how to drag in more friends and relatives to take in more money.'

Zhang, a doctor from Taiyuan, the capital of Shanxi province, was brought to Hong Kong by a friend in mid-December for a three-day 'business inspection trip'. It was her first visit to Hong Kong.

Her friend told her that she had set up a 'very profitable business' in Hong Kong and needed more partners, but refused to reveal more.

'I was finally convinced by her because Hong Kong has such an irresistible lure for simple people like me from the mainland,' said Zhang, the mother of a two-year-old boy. 'We just know that Hong Kong has a perfect legal system, and shops there would never sell products like milk powder with melamine.'

On her first day in Hong Kong, she paid HK$5,360 to join DCHL as a distributor after confirming that it sells real French-made products. Her friend received HK$1,000 as commission after the deal.

Zhang was then taken to Zhuhai, where she was persuaded to sign an agreement to entrust a law firm to help her remit HK$62,608 to Hong Kong for a 'big investment'.

'In Zhuhai, I was convinced after being taken to the luxury homes of some senior distributors. They kept trying to persuade me and other new participants to seize a 'rare opportunity' by making a 'big investment' to become a 'count',' Zhang said.

'They pushed us to make a decision within a week. They said it took God only six days to create the world.'

After investing HK$62,608, she found that her referrer had been given further commission of HK$12,521. Meanwhile, Zhang was taught the secrets of the 'franchise system'.

'They wanted me to list 20 relatives and friends who I could either potentially recruit or borrow money from,' she said, adding that she was reminded to remain tight-lipped about her business to everyone, including her husband.

Zhang said new participants were taught that if they wanted to earn their investment back quickly, selecting the right 20 people was the key.

'We were taught that ambitious but embittered poor people were the best targets for recruitment,' she said. 'The ambitious poor would not give up their monetary goals, even though they knew they were trapped, we were told, and would swindle other people to make money.'

A 'sharing session' at a Christmas party on December 19 further emphasised the 'poor rule' to Zhang and other new participants, with several 'successful distributors' from India, Nepal and Thailand outlining the size of their networks.

All the foreign distributors were poor farmers before they joined DCHL, and they told the mainland recruits that they had to liquidate their assets to raise the HK$62,608 needed to join DCHL as a 'count'.

'But now I have several hundred downstream members, and could afford to treat my elder brother's whole family to a trip to Singapore that cost HK$100,000,' a Thai distributor said.

An Indian woman said she had nearly 200 downstream members, while a Nepali man said he had recruited about 500 people in his hometown, where many families still lived a hand-to-mouth existence.

Their tales made the mainland recruits more confident about the 'magic system', believing it would make them rich. Zhang even planned to raise more than HK$400,000 to upgrade her status to 'junior marquis' after leaving Zhuhai.

But she was later made suspicious by the way her referrer repeatedly warned her against seeking out any negative information about DCHL on the internet.

'She kept reminding me not to check anything about DCHL on the internet. When I did, I was shocked to find countless complaint messages left by former DCHL distributors on many well-known chat rooms,' Zhang said.

'I realised I was badly trapped. Most of the money I had used was borrowed from my sisters. I cried when I saw how my dream of getting rich was never going to come true.'

Zhang decided to drop out of the company in February because she didn't want to cheat her friends and relatives. She travelled to Hong Kong by herself to apply for a refund, and then again to get some of her cash back.

'I was lucky because I woke up within 90 days and could get a refund of half of my investment,' she said.

Writer Murong Xuecun, who published a book on his 23-day undercover investigation of a pyramid-sales scam in Jiangxi, said a lack of common sense among mainlanders was to blame for rampant multi-level marketing swindles.

'Many mainland Chinese, rich or poor, well educated or not, have a common failure to understand the rule 'no pain, no gain', as well as the importance of credibility in the international commercial community.'


The proportion of the refund Angela Zhang got on her HK$67,000 investment in DCHL, because she backed out within 90 days