Initial victory declared over health fraud

Top market regulator concludes recent crackdown, says long-term plan needed

China's top market regulator on Sunday declared initial victory over illegal practices in the scam-ridden healthcare products industry that mainly targets consumers age 60 and older, as a 100-day crackdown on substandard products and false advertising ended.

However, officials say a long-term supervision system is needed to stop the problems once and for all.

Yan Jun, an official of the State Administration for Market Regulation who is responsible for fighting pyramid schemes and regulating direct selling, said irregularities have been effectively contained at the end of the monthslong campaign launched by 13 central government departments, including the Ministry of Public Security and the National Health Commission.

"But the root cause persists," he said, adding that the administration has been working to prevent unscrupulous peddlers of faulty healthcare products from making a comeback.

According to Yan's office, authorities have inspected 731,000 retail stores selling healthcare products nationwide, and hundreds of thousands of hotels, parks and communities frequently targeted by the direct sellers.

The campaign resulted in the deletion of 97,000 advertisements exaggerating the curative effects of products and the shut down of almost 3,900 websites, WeChat accounts or apps belonging to the companies.

More than 21,000 cases with a total value of 13 billion yuan ($1.9 billion) were filed, with 9,505 solved and 446 sent to police for further investigation.

To avoid a resurgence, Yan said the relevant parties will work together to create a fair market that helps safeguard consumers legal rights.

Measures include preserving the current multidepartmental collaboration led by the top market regulator to promote efficient oversight, and organizing follow-up inspections to reinforce achievements.

Yan also said strict supervision would continue in vulnerable sectors and places, and a media campaign will be launched to improve the public's legal and scientific literacy.

The crackdown followed a number of scams that were put under the spotlight of the country's sprawling healthcare products industry. The scams ensnared many retirees who have money but are vulnerable to deceptive advertisements.

A report on senior consumers released this month showed tactics such as fraud and deceptive advertising are frequently adopted by some tourism and healthcare companies that depend heavily on such customers. The seniors studied were found to be vulnerable to deceptive tactics because they lack timely access to information and have insufficient media literacy.

In January, police detained the founder of Quanjian Nature Medicine Technology on allegations of fraudulent practices. Controversy resurfaced over the death of a 7-year-old girl in 2015 who had used the company's products as part of her cancer treatment.

The fall of the Tianjin-based company was followed by probes into other healthcare product giants, including the Hebei Hualin Acid-Base Biotechnology, Tiens Group and Infinitus, with many of their victims being retirees who yearn for company and health.