Re:Pyramid schemes causing social harm in China – crackdowns...
by tialaramex on Monday February 05, 2018 @07:11AM
(#16308294)
It's probably not possible to solve this with law.
Even the Pyramid Scheme part is semi-optional with newer scams.
The last one I looked at had the usual Pyramid shape, with complicated rules so that it'd always turn out that you didn't get any money, but to defuse the whole "it's a pyramid scheme" thing they said well you can just buy the product and not "join" anything, that's fine too...
And then you realise, wait a minute, the product is basically fruit juice in a fancy bottle for maybe 5000% markup. So, even if you didn't fall for the pyramid scheme, if you buy the juice you _already got scammed_.
I looked at their company structure and the MLM company is legally completely separate from the juice company even though you can't buy the juice elsewhere. So even if the MLM company was shut down for being an outright scam (which isn't likely even in a country that doesn't elect a barely literate reality TV star to run it) the juice company locks in a large fraction of the profits and that's 100% legal, they simply sell a cheap product at a high price and keep the difference for themselves, nothing could be more in line with the American Dream.
Because the MLM makes people buy juice to get their money, and that leaves them with crates of awful-tasting juice they'll never drink, they're tempted to eBay it for say, half the RRP to cover some of their losses. But of course if the juice was available on eBay for half price it shows everybody what a scam this is, so company policy strictly forbids this...
Even the Pyramid Scheme part is semi-optional with newer scams.
The last one I looked at had the usual Pyramid shape, with complicated rules so that it'd always turn out that you didn't get any money, but to defuse the whole "it's a pyramid scheme" thing they said well you can just buy the product and not "join" anything, that's fine too...
And then you realise, wait a minute, the product is basically fruit juice in a fancy bottle for maybe 5000% markup. So, even if you didn't fall for the pyramid scheme, if you buy the juice you _already got scammed_.
I looked at their company structure and the MLM company is legally completely separate from the juice company even though you can't buy the juice elsewhere. So even if the MLM company was shut down for being an outright scam (which isn't likely even in a country that doesn't elect a barely literate reality TV star to run it) the juice company locks in a large fraction of the profits and that's 100% legal, they simply sell a cheap product at a high price and keep the difference for themselves, nothing could be more in line with the American Dream.
Because the MLM makes people buy juice to get their money, and that leaves them with crates of awful-tasting juice they'll never drink, they're tempted to eBay it for say, half the RRP to cover some of their losses. But of course if the juice was available on eBay for half price it shows everybody what a scam this is, so company policy strictly forbids this...