Countering Illegal Multilevel Marketing

Countering Illegal Multilevel Marketing

  • Submitted By: htha0shaire
  • Date Submitted: 11/08/2013 4:36 PM
  • Category: Business
  • Words: 724
  • Page: 3
  • Views: 117


1. Actions taken by governments

1.1 The Unites States of America
The U.S Federal Trade Commission warns "Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It's best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products." and states that research is your best tool, giving eight steps to follow:
1. Find — and study — the company’s track record
2. Learn about the product
3. Ask questions
4. Understand any restrictions
5. Talk to other distributors (beware of shills)
6. Consider using a friend or adviser as a neutral sounding board or for a gut check
7. Take your time
8. Think about whether this plan suits your talents and goals
2.2 Vietnam

In Vietnam, MLM has been recognized as a legal form of business since the adoption of The Law on Competition in 2004. However, illegal MLM is prohibited. According to Article 48, Law on Competition, which addresses the illegal multi-level selling of goods:

Enterprises shall be prohibited from conducting the following acts aimed at obtaining illegal profit from recruitment of new participants to a multi-level sales network:

1. Requiring persons who wish to participate to pay a deposit, to purchase an initial fixed quantity of goods, or to pay an amount of money in order to have the right to participate in multi-level selling of goods;
2. Failing to undertake to re-acquire the goods sold to participants for resale at least ninety (90) per cent of their original price;
3. Allowing participants to receive commissions, bonuses, and/or other economic benefits essentially only from enticing other persons to participate in the multi-level sales network;
4. Providing untruthful information about the benefits of...

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