The Cobra Group

Last updated

The Cobra Group
TypePrivate
IndustryMarketing
Founded1988
FoundersDanny Rae
and
Chris Niarchos
Founder and chairman
Headquarters
Hong Kong
Area served
Global
Products Multi-level marketing
Subsidiaries Appco Group
Website cobragroup.com

The Cobra Group is a door-to-door selling and marketing company headquartered in Hong Kong. Investigations by the media have found that the company promises much larger compensation rates than employees actually receive as commission-only, self-employed workers. It is also criticised for being a cult, a scam, and a pyramid scheme. [1]

Contents

The company has an affiliate network of legally independent sales companies in 25 countries throughout Europe and Asia. The Cobra Group's subsidiaries represent firms in industries such as telecommunications, home security, energy and financial services. The group is also contracted by some charitable organisations to collect donations. [2]

Criticism

Common criticism of the Cobra Group and its subsidiaries are that they are cult-like, exploit workers, and run as scams or pyramid schemes. Cobra subsidiary Appco has responded to such criticisms on its official site. [3] When a donor signs up to give money to a charity for 12 months, more than 90 per cent of that money goes to Appco in some cases. [4] Workers in Australia who failed to meet sales targets have been made to perform humiliating rituals involving simulated sex or "slug racing", which involves writhing on their stomachs across the ground. [5] The Cobra Group has hundreds of associated companies, often listed separately under different names.

Investigations

A Zimbabwean woman won a legal case against a Cobra Group affiliate for unfair treatment in the workplace. She was awarded €5000 in compensation for "harassment and discriminatory treatment" and €45000 for discriminatory dismissal. [6] The main argument the company used in defending its case was that the worker in question had been a self-employed sole trader and not actually an employee of his company. Prior to the dismissal the worker in question had been lauded as the highest fundraiser within Boss Worldwide Promotions Ltd. [7]

An investigation by the media found that one of The Cobra Group's 'subsidiaries', The Coulson Organization, which collects charity for the Red Cross among others, has charity collectors take down private financial information without vetting the staff amongst many other deceptive, unethical or illegal practices. [8] The company said they ask recruits to detail any criminal histories. The investigative journalist said they were given a badge that indicates they had been vetted, though they had never provided any identification. [8] The journalist was told she would make 35 pounds per sale, but was only actually paid half, unless the donor agreed to make continual donations for six months. [8]

The BBC investigation led the Department for Business, Enterprise and Regulatory Reform Energy Select Committee to release a report [9] threatening to ban energy companies from using direct sales. [10] Video footage showed Cobra Group contracted companies lying to potential customers. [11]

In 2014, Special Olympics Australia was in financial trouble after the APPCO Group took more than $7 million of about $12 million that had been raised for the charity, leading to an investigation by the then New South Wales Office of Liquor Gaming and Racing. [12]

Some of its activities include stopping people in public or going door to door to try to collect money for charities. [13] On 2 June 2014, the New South Wales Office of Liquor, Gaming and Racing announced it would begin an investigation into the conduct of Cobra Group subsidiary Appco over its running of a gift voucher program for Special Olympics Australia. [14]

A class action alleging the business an illegal pyramid scheme, underpayment and structured humiliation of Appco charity collectors in Australia was launched in October 2016. [15] [1] Lawyer Rory Markham, from the law firm that is running the class action, has described it as, "One of the most systematic and largest underpayment disputes in Australian history, with the victims being young Australians, generous donors, charities and the taxpayers". [16]

Sponsorship

The Cobra Group (and founder Chris Niarchos) have sponsored various types of motorsports drivers since 2003. [17] [18] Chris Niarchos, through the Cobra Group, partnered with Andrew Kirkaldy in 2006 to the form the British racing team then known as "AKA Cobra". This partnership led to the formation of CRS Racing in 2007. [19]

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References

  1. 1 2 "Appco: Workers launch $85m class action against marketing giant over alleged underpayment, bullying - ABC News (Australian Broadcasting Corporation)". Abc.net.au. 22 October 2016. Retrieved 28 February 2020.
  2. ↑ "The Cobra Group". 2009.
  3. ↑ "Mythbusters | Appco Group | About us". Archived from the original on 24 April 2016.
  4. ↑ Doran, Matt (19 June 2017). "Be careful with your generosity". The Daily Telegraph. Sydney. Retrieved 17 February 2019.
  5. ↑ Knowles, Lorna (18 May 2018). "'Charity muggers' win first round in Appco class action over alleged exploitation". ABC News. Australian Broadcasting Corporation. Retrieved 17 February 2019.
  6. ↑ "DEC-E2007-072 – Full Case Report". December 2007.
  7. ↑ Shanahan, Catherine (15 January 2008). "€50,000 for unfairly dismissed woman | Irish Examiner". Archives.tcm.ie. Retrieved 20 March 2012.
  8. 1 2 3 Ford, Coreena (17 October 2010). "North Red Cross Charity collectors probed".
  9. ↑ The Committee Office, House of Commons (15 December 2008). "House of Commons – Business and Enterprise – First Report". Parliament of the United Kingdom. Retrieved 20 March 2012.
  10. ↑ "Shutting the door on doorstep salesmen | Archive". Marketing Week. Retrieved 20 March 2012.
  11. ↑ "BBC Inside Out – Rogue salespeople". BBC. 13 October 2003. Retrieved 20 March 2012.
  12. ↑ Worthington, Elise; McClymont, Alison (30 June 2015). "Special Olympics Australia raids bank accounts of local branches to keep struggling organisation afloat". ABC News. Australian Broadcasting Corporation. Retrieved 9 March 2019.
  13. ↑ Penman, Andrew (4 August 2005). "Just £6 for eight days Cobra Group work". Archived from the original on 5 April 2010. Retrieved 31 May 2012.
  14. ↑ Jeong, Saimi; Safi, Michael (19 June 2014). "Global fundraising company keeps $7m of $12.2m raised for Special Olympics". The Guardian. Retrieved 17 February 2015.
  15. ↑ Ferguson, Adele (21 October 2016). "Lawsuit throws spotlight on charity fundraising". The Sydney Morning Herald. Retrieved 21 October 2016.
  16. ↑ "Former 'chuggers' join class action against Appco alleging underpayment of wages". Smh.com.au. 21 October 2016. Retrieved 28 February 2020.
  17. ↑ "Sky To Sponsor Cr Scuderia". Motorsports Journal. 10 January 2008. Archived from the original on 3 March 2012. Retrieved 20 March 2012.
  18. ↑ "GT: BGTC: Media giant Sky to sponsor CR Scuderia". Motorsport.com. Archived from the original on 6 June 2011. Retrieved 20 March 2012.
  19. ↑ "crscuderia.com". crscuderia.com. Archived from the original on 8 July 2011. Retrieved 20 March 2012.
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