Japan Life sold ¥240B in magnetic necklaces nobody rented

Japan Life was founded in 1975 in Tokyo to sell down comforters and healthcare goods. Its core product became magnetic therapy devices — necklaces, belts, mats — sold to individual customers for millions of yen each. The buyer never took the product home. Instead, Japan Life offered to 'rent' the device to third parties and return part of the rental fee as a dividend. A second programme paid dividends to anyone who recruited new buyers. The Consumer Affairs Agency later designated the arrangement a pyramid scheme.

At its peak in 1985, Japan Life reported sales of ¥150.9 billion, operating roughly 80 branches across 37 prefectures. The model depended on a growing pool of new customers to fund dividends to existing ones. As recruitment slowed, sales fell to around ¥20 billion. By March 2017 the company carried ¥33.8 billion in declared debt. The Consumer Affairs Agency issued four business-suspension orders beginning in December 2016.

In March 2018, the Tokyo District Court opened bankruptcy proceedings with total liabilities of approximately ¥240 billion ($2.2 billion). Roughly 6,800 customers across Japan were affected. The Metropolitan Police Department opened a criminal investigation for fraud. The former chairman was later sentenced to eight years in prison. A company board member had told reporters in January 2018: 'We have adjusted our operations according to the law, and there is no fact of a legal violation.'