Pyramid schemes have been taking advantage of poverty-stricken ethnic minority people in the central highlands province of Kon Tum.
A Mac shows off an unused ozone machine worth VND4.7 million (USD228)
In recent months, hundreds of ethnic minority people in Kon Tum Province\'s Dak Glei District have sold their crops before harvest in order to buy luxury goods such as ozone machines, magnetic cookers, and massage machines at exorbitant prices. These are things they can hardly afford on their meagre incomes, and are sometimes almost useless to their lifestyles.
Regrettable decisions
The operation that has taken advantage of the residents of Dak Glei has set up networks across the country. Victims are drawn in with promises of large commissions if they buy expensive goods, and then convince others to do the same.
The people of Dak Long, Dak Mon and Dak Kroong Communes face hunger every year. The Government often has to provide them with rice and other food between harvests.
A Mac and his wife, Y Nin, from Dak Long Commune’s Dak Ac Hamlet, have five children. They live under the poverty line.. However, in April they borrowed money from their relatives and neighbours to spend VND15 million (USD727.6) to buy such luxury goods.
Mac explained his decision, “I want to change my life. If i can get 100 other people to join the network, I’ll get a commission of VND1 million. I’m hoping that I can increase my income by between VND10-40 million. Then I’ll be able to pay back the money I borrowed.”
He admitted, however, that his spending on these items has made it difficult for his family to eat.
A Thin, of Pim Long Village, was convinced to buy a massage machine for VND6.3 million (USD305.6). He bought the machine four months ago, but have used it only five times; they are constantly busy tilling their fields.
Helpless authorities
A So Lai, secretary of Dak Long Communal Party said, “Over 90% of population in the commune belong to H’Lang and Je ethnic groups. Over 60% of them are living in poverty. The average annual per capita income is about VND5 million (USD242.5). However, hundreds of families in the commune have spent nearly a combined VND800 million (USD38,806) on the purchase of luxury goods.”
According to Lai, local residents are drawn in by the desire for a better life, and are not familiar with the company they are dealing with, or their marketing methods. Not only have many of these families borrowed money and sold their crops, some have even gone as far as putting their homes up for sale in order to join in the programme.
Even though local authorities have started to coordinate with border guards to educate the public about such scams, they have been largely ignored by residents. Previously, if there was a group of ten people willing to spend money, the company would send a car to take the to Quy Nhon to make their purchases. Since the local government has put a stop to this, residents simply make their way to National Highway 14, and the company car takes them from there, Lai shared.
The communal government held a talk with a company official named Truong Thanh T, who showed prices of items that were five to six times less than what they had been charging people. He also insisted that the programme had been started by the residents themselves and that the company had no responsibility for it.
Since, this official has promised to return to the commune for further talks. But he has yet to show up. His phone has been disconnected. All the communal authorities can do now is seek help from higher levels of government.
The company continues to operate, and is even spreading its network to other poverty-stricken areas.
VND2.5 million (USD121.2) for an undershirt
VND5.2-million (USD252.2) electric cooker lies idle in hungry household
Local authorities are helpless
A leaflet published by the company
