Strictly manage multi-level marketing activities

Besides the licensed multi-level marketing activities, which are fundamentally regulated by Decree 18/2023/ND-CP on the management of multi-level marketing activities, illegal and disguised multi-level marketing models are becoming increasingly complex, causing instability in the business environment and harming consumers. Along with requiring localities to strengthen the dissemination and promotion of laws to the public, the Ministry of Industry and Trade is continuing to implement more decisive measures to effectively rectify these activities.

Strictly regulate the operation of disguised multi-level marketing schemes. Despite numerous warnings from authorities, many people still blindly fall victim to fraudulent schemes involving disguised financial investments.

Currently, there are 15 licensed multi-level marketing businesses in the province, with a total of over 21,000 participants. Since 2022, the Department of Industry and Trade has annually coordinated with agencies such as the police, market management, and local authorities to organize conferences to disseminate legal knowledge and identify signs of fraudulent multi-level marketing schemes. In particular, the department has intensified its awareness campaigns in areas where conferences and seminars exploit promotional offers to sell overpriced, unverified goods.

According to the Department of Industry and Trade, from 2022 to the present, the unit has coordinated the organization of conferences to disseminate and publicize laws to 5,000 officials, civil servants, and local people. Functional agencies have also compiled and distributed tens of thousands of leaflets and promotional materials on multi-level marketing activities. In addition, functional units have coordinated with media agencies to open many special pages and sections to publicize laws on multi-level marketing activities, helping people improve their understanding and vigilance against fraudulent multi-level marketing schemes.

In particular, at these conferences, speakers analyzed and pointed out many deceptive tactics, while warning officials, civil servants, and citizens about several business models showing signs of disguised multi-level marketing schemes that are being monitored by authorities. For example, the Thanh Hoa Provincial Police presented several examples of multi-level marketing, including scams through cryptocurrency exchanges, websites, technology applications, and even the sale of dietary supplements. Specifically, the unit warned about the Heygen Company's model, which features 10 levels with "huge" rewards and "attractive" profits from team management to entice participants. Meanwhile, according to the National Competition Commission (Ministry of Industry and Trade), Heygen Company is not on the list of registered multi-level marketing businesses. Currently, authorities suspect that some organizations and individuals are exploiting people's lack of understanding to raise capital and invest through multi-level marketing schemes for the purpose of fraud and misappropriation of assets.

However, according to the Ministry of Industry and Trade, although the Departments of Industry and Trade in provinces and cities have actively coordinated with police agencies to combat crimes related to multi-level marketing business models, these models still exist and operate with increasing sophistication, with many new disguised forms, especially those disguised on the internet such as virtual currency, forex, financial investment, etc., causing serious consequences and negative public opinion in the community. Therefore, in order to further improve the effectiveness of managing multi-level marketing activities and enhance the effectiveness of combating crimes related to multi-level marketing business activities, on October 29th, the Minister of Industry and Trade issued Document No. 8645/BCT-CT requesting units under the Ministry and the Departments of Industry and Trade in provinces and centrally-administered cities to continue implementing tasks to further strengthen the management of multi-level marketing activities.

Accordingly, the Minister of Industry and Trade assigned the National Competition Commission to review and propose amendments and improvements to legal regulations on the management of multi-level marketing activities, aiming to meet the requirements of strict management of security and order for multi-level marketing activities (especially for newly licensed cases); to continue monitoring the implementation of laws in the management of multi-level marketing activities by the Departments of Industry and Trade; and to coordinate with police and law enforcement agencies in combating crime in multi-level marketing activities.

Specifically, the Ministry also requested relevant units under its direct control, such as the General Department of Market Management; the Legal Department; the Department of E-commerce and Digital Economy ; and the Departments of Industry and Trade in localities, to continue strengthening activities to disseminate legal knowledge to raise public awareness of multi-level marketing activities; review, advise on the improvement, and propose amendments and additions to legal documents on the management of multi-level marketing business activities; and at the same time, intensify inspections, examinations, and handling of legal violations in this activity.

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