Slaves of the pyramids still captive

Social Affairs

Published: 29 Dec. 2011, 20:17

Slaves of the pyramids still captive

Some 300 students eat lunch at a pyramid scheme marketing company’s training session in the basement of a building in Garak-dong, Songpa District, on Dec. 13. A number of workers in the companies have moved to neighboring districts to avoid a police crackdown. By Kang Jung-hyun

For several months, the police have been cracking down on cult-like pyramid marketing schemes targeting poor college students, but they have not yet been eradicated. Some 1,700 students are still enslaved by five marketing companies in the Songpa, Geoyeo and Macheon areas.

According to the Songpa Police and the Fair Trade Commission, which have been investigating the companies for five months, the illegal marketing companies’ slovenly group housing for entrapped workers have been decreased from 113 sites to 24 in areas police have been investigating. At one point, over 5,000 students were trapped in the system.

But some of companies have simply moved operations to neighboring districts.

The plight of the slaves of the pyramid schemes was exposed in the JoongAng Ilbo in September.

The pyramid marketing schemes are disguised as legitimate businesses selling products or services, and they target young people - mostly college students or graduates from the countryside, often from low-ranking schools - lured by the offer of a decent sounding job in or near Seoul. New members are forced to buy thousands of dollars worth of useless items - usually after borrowing money from banks - and are then told to sell them. The existing members then share the profits. The workers are housed as cheaply as possible in prisoner-like conditions and brainwashed to believe they will someday be rich if they persevere through the hardships. Eventually, they are told to lure classmates or friends into the companies, who become the new, lowest-level slaves.

“There are students with debts from the loans they’re forced to take out,” said Kim Seon-gi, head of the special investigative team, “who have the attitude that they’ll finally succeed if they hang on as long as they can.”

Kim said the companies have moved their workers, who are forced to live together, from Songpa to neighboring areas such as Gangdong District, Amsa-dong, Dunchon-dong, and Seongnam and Hanam cities in nearby Gyeonggi Province. Eunhaeng-dong in Seongnam is also becoming a new center for the companies.

As the crackdown continues, the marketing companies have abandoned coed housing - with over a dozen youths squeezed into single apartments - to single-sex housing to avoid attention from the outside. The workers have also been told, “Do not believe what the media says.”

“Their tactics get more covert over time,” an officer of the Songpa investigative team said.

The companies are still recruiting new workers, targeting college students on winter vacation.

The JoongAng Ilbo Special Report Team, after investigating the methods of the largest companies in Songpa District, found that the companies tell the students, “If you work diligently for six months to a year, you can earn 10 million won monthly.”

The numbers don’t bear out that promise.

One marketing company in Songpa that had 5,300 workers earlier in the year, although some have since quit, had a hierarchy with the following tiers: Planners, Silver Planners, Gold Planners, Master Planners and Super Master Planners.

According to data gathered by the JoongAng Ilbo, the 153 Gold Planners earn a monthly wage of about 230,000 won, not 880,000 won as rumored. The 125 Master Planners, who have been working for one to four years, can earn 1.9 million won a month.

The bottom ranks of Planners and Silver Planners earn almost nothing, most of their revenues being offered up to the workers above them.

One 22-year-old worker surnamed Ha, who had escaped the Songpa company, said, “Although we were told until our ears stung that if you become a Master Planner you can send your family 5 million won a month and buy an imported car and wear a luxury suit, it was all lies.”

By Special Reporting Team [sarahkim@joongang.co.kr]