Scam of the day

February 4, 2008 – 1:33 pm

A couple months ago, a friend of mine paid somewhere between RMB 4,000-5,000 for a year-long membership to a gym. The gym was called Bomai and it was located in the Oriental Kenzo building by Dongzhimen (in Beijing). A few weeks ago, she went to work out as usual, gym bag in tow, and found the space completely vacant, doors chained shut.

Now my friend is, understandably, pretty pissed off about being out a couple thousand kuai. She tried calling the gym’s number but it’s out of service. When she originally paid for her membership the gym had taken down her name and address and phone number, and thus ought to have been able to contact her. She’s going to try calling the building management but she’s not expecting that they will, or will be able to, do much.

Her experience got me thinking about other plans like this where you pay a lot of money up front. Take, for example, the drinking water for my apartment that I pay for up front, 10 jugs’ worth at a time. Every time I want a new jug of water delivered I call a number and a guy appears at my front door with shower caps over his shoes to install the new jug.

(I recently switched to a new brand, by the way, that evidently involves as a matter of course my water cooler leaking water all over the floor for a full minute after the guy puts the jug in. Neither I nor he have been able to figure out anything we can do beyond just standing and watching the water spill out for a minute and then mopping it all up every single time he delivers a new jug of water. My roommate was recently home for the first time when a jug was being delivered and started to freak out when she saw the tsunami begin, upon which the delivery guy and I calmly assured her that the appearance of a small lake on your kitchen floor was a perfectly normal part of any water-jug installation process.)

What if I called one day and no one answered and it turned out that the whole operation had vamoosed? Or what if someone went around in the guise of a water company and got a whole lot of people to pay for water up front and then vamoosed into the deep woods of Thailand? (I know Thailand doesn’t have any woods but that is now my new favorite expression, borrowed from CIB Viewpoint columnist Andy Xie.) I guess there wouldn’t be anything I could do.

Slightly larger sums of money are involved for the unfortunate members of Bomai gym, so I wonder if my friend has any legal recourse. Perhaps I will ask our resident legal advisor, CIB legal columnist Steve Dickinson of the China Law Blog, to whom we turn for all our random legal questions (like: why are golf courses, of all things, on the list alongside more obvious choices like pornography and armaments as an area that is off-limits to foreign investment here?)

Gee this would be a much more worthwhile post if I’d actually talked to some lawyers before posting, so that you’d get to this paragraph and find all sorts of compelling and helpful answers. Well, I’ll get to polling now, and will post back again if I learn anything interesting.

 Eveline Chao

  1. 2 Responses to “Scam of the day”

  2. Eveline,

    Dan here. CLB’s other half. Steve is hoping to be boarding a plane very soon for sunny and warm Cambodia. Assuming the plane leaves.

    Anyway, the answer to this is, it depends. If the company is no more, than it is very tough to collect anything at all. If the taking of the money was done AFTER the company knew it was to be closing down, you might be able to recover from whomever personally did this. Again, though, the real issue is less the legal one than the difficulty in actually collecting. Also, even though China now has a bankruptcy law, the chances that the company will actually file bankruptcy (which would allow you to submit a claim in the bankruptcy) are incredibly slim. Lastly, a lot will depend on the contract itself. For example, there may be some provision in the contract allowing the company to do exactly what it did without giving you any real recourse.

    The real answer though is that your gym rat friend is probably completely screwed and if your water company goes underwater (pun intended) you too will probably be sunk (again, pun intended).

    By ChinaLawBlog on Feb 4, 2008

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