China hit by financial scam 'epidemic'

Pyramid schemes are flourishing in parts of the country where education levels are low.

The schemes prey on the vulnerable, typically young people and the elderly, with the promise of employment or lucrative returns for direct sales of products like cosmetics or health supplements.

Victims are assured of great fortune if they recruit more investors into the operation. Pyramid - and Ponzi - schemes rely on attracting a constant stream of new investors, and some of the funds raised are paid to earlier backers.

Ms Ho says the Chinese swindles are distinct from frauds typically seen in Western societies due to the lack of sophistication of the investors involved.

Victims have sunk everything they have - borrowing money and even selling their houses - on the promise of even bigger returns. Chinese social media site Weibo is awash with talk of pyramid schemes. "I've lost count of the people who've been trapped", said one user.

UCJ, UNILORIN.