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October 21, 2010

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Students in illegal sales

CITY watchdogs have revealed that students form the biggest single group involved in pyramid selling schemes, a business model which is banned in China.

The Shanghai Industrial and Commercial Administrative Bureau said yesterday that of the 3,500-plus people involved in the 116 pyramid sales cases officials have investigated in the past three years, hundreds were college students. Many were seniors facing mounting job-hunting pressure.

Officials said many students were pressurized into joining pyramid sales organizations out of Shanghai. One local science and technology university reported to the bureau that four students were intimidated into joining an organization to Xinyang, Henan Province, by being kept captive without access to their cell phones for a fortnight.

After being rescued by Shanghai police, the students said a fellow student introduced them to the organization.

The bureau warned that pyramid organizations sometimes pose as non-governmental organizations offering to help college students to find a job.

"An organization with a decent name, 'Chinese Student Job-Hunting Federation,' fooled many students," said Tang Yaohong, deputy chief of the direct selling supervision and pyramid sales crackdown division of the bureau.

"Students don't know the truth until they are forced to recruit lower-level participants."

According to the police, pyramid schemes have reached well-known colleges, such as Fudan University and Tongji University.

"Some students play important roles in pyramid schemes," said Tang. "They are cheated at first, and then just go on to cheat others by the same means."

Some 14 colleges in Shanghai yesterday signed an agreement to inform the authorities if they uncovered pyramid sales schemes.


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