The perils of being lured into pyramid selling schemes have been highlighted again as more young victims seek help from the Hong Kong Federation of Trade Unions.
It has prompted calls from federation lawmaker Ip Wai-ming for the government to ban such schemes. He also warned young people to stay vigilant when looking for work.
In a recent case, a 19-year-old accounting student, took a job with a telemarketing company but soon found himself facing bills of tens of thousands of dollars.
The student said he was approached by a friend to join the firm. After working for several days, the friend and a manager persuaded him to enrol in a language course and buy a beauty package which cost a total of HK$42,000.
'They said I could be a better salesman if I had tried the services myself,' he said. The two accompanied him to three loan companies and a bank to raise the money.
'They said I would be paid HK$1,000 to HK$2,400 for each person who signed up for the pyramid scheme. I thought then that I could easily repay the loan.'
However, he failed to recruit a single member and quit after two weeks.
His mother, a housewife, reported the case to police, who refused to help, and pleaded her case with the loan companies, but to no avail.
Her husband earns HK$10,000 a month as a construction worker and she said the whole family had to skimp to repay the loan.
'We just repaid HK$20,000 of it. For the remaining amount, we have to pay in instalments,' she said. Ip said the Monetary Authority should strengthen monitoring of the loan companies.
It took each company around 10 minutes to approve the loan to the student, he said. 'How can it be so easy for a youngster with no job to obtain over HK$40,000 in loans?
'Over the past two months, we have received four similar cases, all involving young people.'
The government is reviewing consumer protection laws to crack down on unscrupulous sales tactics in the services sector.
The Commerce and Economic Development Bureau has proposed that the existing trade descriptions law be extended to cover services.
Ip said the government should ban unscrupulous sales tactics.
He added: 'There should be a cooling-off period for consumers to quit a service contract [and get a full refund].'