An Asian chain running a controversial multilevel marketing scheme in Hong Kong has agreed to refund its customers after a series of protests and negotiations, but has yet to give details on when and how it would do so.
Yesterday, about 80 mainlanders who negotiated with Digital Crown Holdings HK (DCHL) registered for a HK$67,000 refund each, said a member of an alliance against the health and beauty products distributor.
The alliance has organised several protests this month, claiming its members were tricked into buying products such as wine, jewellery, cosmetics and fragrances that had almost no resale value. They had to spend at least HK$67,000 each time, and some had made purchases up to 16 times.
Those gathered at the company’s Causeway Bay centre yesterday were asked to register and told that the management would decide later on when and how they would get their money back. The chain did not say if it would refund the rest of their purchases, said a man who identified himself as a volunteer with the alliance but not a customer.
“It’s totally unacceptable to me,” said the man, who wanted to be known only by his surname, Peng. “The company operated against the rules. But most of them are accepting this offer first. They have waited for three days, and this is a bit of hope for them.”
There were about 20 others who joined the previous protests, but they returned to the mainland yesterday, he said, adding that it was unfair for those who missed out on the registration.
At the centre yesterday was a Shenzhen customer, who wanted to be known only by his surname Zhong. He said he spent HK$300,000 on products such as jewellery and fragrances.
“The company persuaded me to join the business by telling us that I could never get rich doing what I used to do,” he said. “They told me a lot of people became rich in this business.”
Zhong said that to finance his purchases with DCHL, he borrowed money from his family, friends and even loan sharks. He had no idea how he would repay his debts, he said.
“Even if the company is eventually willing to pay me back all the money, it just cannot compensate me mentally,” he said, adding that some of those lured into joining the scheme were as young as 18 years old.
A Guangzhou customer, Xu Meikwan, said he also spent HK$300,000 on DCHL products.
“The company brainwashed me by saying that some people who used to be very poor made big money through the company,” he said.
The chain’s customers said they were recruited to become individual distributors during “brainwashing” sessions in Hong Kong where they were told they would be rewarded through a complex bonus system according to their seniority.
DCHL is allowed to operate in Hong Kong under a law that permits multilevel marketing, but such tactics are banned across the border as pyramid selling.
Video: Mainland Chinese protest against a Hong Kong beauty product company, claim to be cheated