A Chinese lawmaker is urging the legislature to revise the
country's Criminal Law to tighten punishment on pyramid selling so
as to secure a good market environment.
"Pyramid selling is becoming more and more serious in many
places, which has led to a series of social and security problems
including robbery, kidnapping, theft and illegal detention," said
Liu Litao, a deputy to the Tenth National People's Congress (NPC)
at the ongoing parliamentary session.
Pyramid selling, in which one salesperson relies on recruiting
subordinate sales people, was banned by cabinet regulations in
1998. Authorities said such a scheme, though an accepted method of
marketing in many other countries, "has become a synonym for
cheating and hoodwinking in China."
Liu said it was estimated that more than one million Chinese had
been involved in pyramid selling and about 40 billion yuan (US$5.
23 billion) was absorbed into it," said Liu.
"The crackdown on pyramid selling launched by the industrial and
commercial regulators and public security departments has scored
limited effects due to the lack of relevant laws," said Liu, a
senior police officer in east China's Jiangsu Province.
In 2005, State Council issued regulations to ban pyramid
selling. However, Liu said most of the people involved in pyramid
selling won't get punished according to the current
regulations.
"Therefore, we need to make pyramid selling a crime in the
Criminal Law to tighten punishment on organizers and those actively
involved in it," the lawmaker said.
Pyramid scams exist in both rich and poor regions across the
country. China cracked 3,377 cases of pyramid sales from January to
October in 2006, according to the Ministry of Public Security.
(Xinhua News Agency March 13, 2007)