Multi-level marketing in disguise - a type of pickpocketing

(Baonghean) - Nearly 2 trillion VND was appropriated, more than 64 thousand people became victims in a scam that should be ranked as the most "classic" ever of the so-called multi-level marketing business.

Illustration photo.

The whole country was shocked when the above information was announced. A series of questions were raised to the authorities. Indeed, the story of 2 "successful businessmen" including the one who impersonated a colonel of the army of Lien Ket Viet Company and was arrested along with the immediate collapse of a network of branches spanning across 27 provinces and cities (including Nghe An) has become one of the topics that has attracted special attention from the mass media recently.

All information surrounding this story seems to have been dissected, from different angles such as legal sanctions, social management, business ethics, etc. However, from an economic perspective, we would like to discuss a few more things with the hope of approaching the issue comprehensively and objectively. On that basis, we can contribute to limiting unnecessary mistakes, identifying more, and moving towards reducing distortions in the market economy in our country.

Multi-level marketing is a product of the modern market. Its origin, its purpose or its function is ultimately just a form of product distribution, simply put, a way of selling. First of all, it is necessary to clearly define the difference between multi-level marketing and fraud. The nature of multi-level marketing is not a form of fraud. Multi-level marketing is a type of business that has penetrated our country for more than a decade, it is recognized and protected by law. The promulgation of the Competition Law 2004, Decree 110/2005/ND-CP dated August 24, 2005 of the Government on management of multi-level marketing activities and Circular No. 19/2005/TT-BTM of the Ministry of Trade dated November 8, 2005 guiding a number of contents of Decree 110/2005/ND-CP on multi-level marketing business have affirmed the attitude of our State to recognize the legality of multi-level marketing activities. It must be said that the basic law creates a legal foundation for the relationship between multi-level marketing enterprises and participants by multi-level marketing participation contracts.

Multi-level marketing contributes to expanding the market, bringing quality products to consumers at reasonable intermediary costs. The selling price (wholesale) of products to people in the system is not higher than the retail price of similar products on the market. In theory, that is true. However, in our country, this type of business is being exploited and transformed in an extremely serious, systematic and widespread way, causing economic damage and affecting the rights of consumers. Now, it seems that not many people believe in multi-level marketing anymore. People either discriminate against and avoid multi-level marketing or rush into it with the aim of making money quickly, only to become both victims and perpetrators of a snatch-and-grab business. Limited knowledge, excessive gullibility and the inability to control greed have pushed many people into bankruptcy right on the pile of virtual money they pursued recklessly.

Invest 8 million, after four years you will have 500 million! That is the information coming from the eye of the storm... multi-level marketing. How many people believe that? Certainly, but probably not too many! Greed and the impasse in life did not hold them back or is there another reason? The full answer will wait for the responsible agencies. There have been opinions suggesting a complete ban on this type. However, if you cannot manage it, banning it is never the right solution.

It is known that there are currently over 1 million people nationwide participating in various multi-level networks. So how many of them are victims of fraud and how many potential customers will join that mighty "business" army? In fact, the tricks of Lien Ket Viet as just now are not too sophisticated. Still just impersonating officials, impersonating the Prime Minister's certificates of merit, borrowing a few famous people to attend seminars to show off, promising to pay high commissions to attract... just like that, but they have been operating for a whole year. It is time to review and rectify. Decree 110/2005/ND-CP of the Government; Circular No. 19/2005/TT-BTM of the Ministry of Trade (on multi-level marketing) are also over 10 years old. A strict attitude is needed towards these "pickpocketing" multi-level types. I don't think a society will be healthy, an economy will develop positively if workers are increasingly... multi-leveled.

Nguyen Khac An