The Ministry of Industry and Trade aims to announce the results of the investigation into seven multi-level marketing companies this May.

The ongoing investigation , focuses on recognising illegal pyramid schemes masquerading as business opportunities. 

In late March, the ministry (MoIT) assembled a team to look into the operations of Amway Vietnam, Unicity Marketing Vietnam, Thien Ngoc Minh Uy, Tap Doan Lien Ket Vietnam, Lien Ket Tri Thuc, Lien Minh Tieu Dung Thang Long, and Nhuong Quyen Thang Long.

SpecificallyEspecially, Amway Vietnam, Unicity Marketing Vietnam, and Thien Ngoc Minh Uy ranked at the top ofin the list of multi-level marketing companies with the largest revenue in Vietnam. 

The members of the investigation team members include representatives from MoIT’s  Vietnam Competition Authority (the government’s management body for multi-level marketing businesses) and Market Management Department, who work in tandem within cooperation with the Investigation Police Department on Economic and Corruption-related Crimes.

Since March 9, Vietnam Competition Authority under the MoIT has revoked five companies’ registration certificates for fraudulent activities. 

Besides, municipal departments of industry and trade are also participate in theboosting investigations.

For instance, the Hanoi Department of Industry and Trade punished several companies operating in the city for violating regulations on multi-level marketing businesses.

The investigations was launched after the MoIT’s Minister Vu Huy Hoang issued a directive requiring agencies to search out pyramid schemes falsely labeled as multi-level marketing companies, swindlingleading to thousands of people swindled. 

In multi-level marketing, salespeople are awarded bonuses not only for their own sales, but also for those made by new members recruited by them original salesperson.

Fraudulent companies can use this system to rapidly grow a large network of salespeoplepeople from whom they take money.

The latest case of fraud was disclosed in February, when a company called Lien Kiet Viet was caught swindling some 60,000 people in more than 27 cities and provinces nationwide, appropriating a total of VND1.9 trillion ($87.15 million) since 2014. 

Multi-level marketing firms were was allowed to operate in Vietnam at the request of foreign countries during Vietnam’s negotiations to join the World Trade Organization.

Since 2009, foreign-owned companies have been eligible to conduct thesuch business in the country. Currently, nearly half of the 61 operating companies are wholly foreign-backed.