Business practices questioned and refunds demanded as protestors occupy roof
Latest: Jan 9th 2014. Check out the photos from the latest DCHL demonstration.
It’s 1:30am and the protest is still going on across the road from my flat. If I look out of my window I can see four fire engines, two police vans and an ambulance, and my view isn’t even that good.
They are there because of a group of mainland protesters have installed themselves on the roof of the Causeway Bay centre of Digital Crown Holdings (DCHL), a Hong Kong company that is the centre of a controversy involving what many are calling a pyramid scheme. They were there this afternoon too, though still at street-level, protesting against what they say is a scam deigned to trick customers into buying overpriced products which cannot be resold for the riches they were promised.
DCHL claims it runs a legitimate business in accordance with Hong Kong law. But the multi-level marketing strategies it employs are already banned in mainland China, Australia and the EU, while in Hong Kong, the company has been dogged by allegations against its supposedly shady business practices for several years.
Such shadiness is exactly what prompted the protests today. According to the South China Morning Post, many of those protesting had paid HK$67,000 in order to join the reselling scheme only to find that the health and beauty products they supposedly bought had little or no resale value. They were in Hong Kong to demand a refund of their cash and to seek some kind of justice against what they see as a deliberate attempt by the company to exploit its mainly mainland customers.
With multi-level sales schemes still permitted in Hong Kong, DCHL has been accused of exploiting a loophole in the law by encouraging its ‘distributors’ to recruit potential salespeople in the mainland, for which they are promised a percentage of any future sales proceeds their recruits go on to make.
Some distributors are said to have paid up to HK$300,000 on products such as wine, jewellery and fragrances, believing that spending more to reach higher and higher levels of the reselling scheme, would earn them larger commissions and greater discounts on future purchases. They are now demanding payback for what they claim are the company’s false promises.
Whether DCHL are actually running an illegal business, however, is still a matter of debate. Multi-level marketing is permitted in Hong Kong as long as genuine products or services are being sold and members are not paid simply to recruit new members. But with the company having had its offices in Macau closed down after legislation outlawed its tactics back in 2008, it is under pressure to prove that its Hong Kong business is still legitimate.
DCHL has offered to refund HK$67,000 to each person that registered when the protests began, though it has given no indication how or when such a refund would be forthcoming. And with many people having spent much more than the initial HK$67,000, the protests do not look like ending any time soon.
Update: It’s just turned 2:25am. The protests and the slogan shouting ceased some time ago. The fire engines, police and ambulances have just pulled away bringing an entertaining evening to a close. Women threatened to jump, an air cushion was inflated in the road below, and the wrath of the perceived cheated was fully focused on Causeway Bay. Same again tomorrow?
Related Post: Check out the photos from the latest DCHL demonstration.