Multi-level marketing capital mobilization is booming in Nghe An

luring the ignorant

For many months now, on major social networking sites such as Facebook, Zalo... there have been a series of posts and invitations to join the Vitae social network. Not only on the internet, according to Nghe An Newspaper reporters, at a cafe on Nguyen Thi Minh Khai Street (Vinh City), a group of "well-dressed" people often gather to discuss how to attract participants. With these "sky-high" words, many people from rural to urban areas have been gullible, spending money to join this risky social network.

Invitations are everywhere on Facebook. Photo: Contributor

Posing as a “prey”, the reporter approached Hai (32 years old, residing in Vinh City). On Hai’s Facebook, there were consecutive posts about “opportunities to become a billionaire” when joining the Vitae social network. After a few short exchanges, Hai said he had joined this social network for 3 months now.

Just as we read on the main website of this social network in Vietnam, Hai said that Vitae is a social media platform or also known as a decentralized social network.

Vitae social network was founded in Switzerland by Michael Weber and his colleagues, launched on December 26, 2018 and operates globally.

“However, unlike the big names in the current social network market, Vitae pays users monthly. 90% of the profits are shared with participants, the company only takes 10% of the income from advertising. There are people who earn hundreds of millions each month thanks to participating in this social network,” Hai said confidently.

A workshop on the decentralized social network Vitae. Photo: CTV

Hai then told us about 4 types of matrices for users to receive money. However, when we looked confused, Hai said: "No need to understand. Just need to have money. You will understand after participating for a long time." According to Hai, there are 2 ways for users to fill their income matrix system, the first way is to invite more people to join. The second way is to buy empty positions in their own matrix. And of course, to start earning money on Vitae, users will have to pay a 200 USD joining fee.

When we seemed hesitant, Hai immediately picked up the phone and called another person and introduced this person who earned nearly 100 million per month thanks to participating in this social network. The two then continuously talked about this person and that person who had a huge income thanks to Vitae.

However, when we asked when the money would be recovered, Hai began to be confused. Because all of this money was in the virtual currency Vitae coin, not in cash. When we continued to ask where the money came from so that Vitae could pay such a huge amount to users, Hai said it was from advertising. However, when the reporter showed information proving that Vitae's homepage, although established for 2 years, only had 4,000 visits per day. This is too small a number for a social network to make money through advertising, both of them were speechless. After a series of difficult questions from us, both of them quietly "withdrew" from the cafe.

A form of fraud

Discussing this issue with Nghe An Newspaper reporters, an officer from the Economic Security Department (Nghe An Provincial Police) said that the social network's promise to pay up to 90% of revenue to users is extremely unreasonable. Such a high revenue rate is usually only seen in fraudulent projects such as Crowd1 (80%), MyAladdinzs (80%)... that the Ministry of Public Security has just issued a warning to the public.

“With no advertisers or investors, where does Vitae get the money to pay its users? It is easy to see that Vitae has signs of following the Ponzi scheme, taking money from later users to pay earlier users, a very popular multi-level fraud method,” the officer added.

A multi-level seminar of MyAladdinz attracted hundreds of participants and was held grandly at Dai Hue Palace Building, Vinh City. Photo: Contributor

According to the reporter's investigation, due to the huge profit level, this social network has attracted many members to register to join. Just type the name Viate to search on Facebook, it is easy to see a series of groups with thousands of participants specializing in this social network. In those groups, most members boast that the amount of money in their accounts has increased by thousands of USD/month, but no one has mentioned how to recover the capital.

Not only Vitae, now alsoa variety of forms of capital mobilizationOther similar ones are also flourishing, specializing in attracting people to participate. For example, Chilimall - an e-commerce platform - is bustling to attract participants with an attractive invitation: "During the Covid-19 epidemic, earn 50 million VND/month at home". This is a buying and selling application where participants only need to download the application to their phone, register to participate and post the products they want to sell here. However, each participating member must pay a fee ranging from gold, silver to diamonds to buy a cryptocurrency called siling, then use this siling to buy products on Chilimall...

MyAladdinz staff promised and enticed players to use “gems” to exchange and buy everything, including cars. Some items to create trust for people to be able to “buy with gems” at MyAladdinz’s workshop in Vinh City. Photo: Contributor

Or the website onelinknetwork.com is also calling on young people to invest in the form of making a profit through a cryptocurrency called OneLink Coin, the more people you attract, the bigger the commission you get...

According to the officer of the Economic Security Department, the money of participants in projects such as Viate, Chilimall... is not recorded on any official document but is only recorded through the participants' accounts displayed on the website interface.

In the first 9 months of 2020, Nghe An Police received reports from many citizens in the province about being lured into investing in the MFCClub (MBI), BBI Mall, BBONUS, MyAladdinz systems... causing losses of billions of dong. The participants were mostly elderly people with little knowledge of technology and the amount of money they invested was very large (some people more than 1 billion dong). Through verification, the investigation agency determined that the money they invested had all been converted into the system's virtual currency.

However, after a period of time, they invested all their money in the system, all their virtual money could not be converted into real money to withdraw to their bank accounts. Information about the system of these applications is unclear, the system server is not located in Vietnam, so it is very difficult to identify and handle the subjects.

Identifying signs of fraud

According to the report of Nghe An Department of Industry and Trade, in recent years, as the level of education of the people has increased, to keep up with the times, fraudulent multi-level marketing companies have also continuously sought to transform. As a result, new tricks and dozens of new front products have been born, from soft skills courses, get-rich courses, online sales, point-based shopping (MyAladdinz, BBI Mall, MFCClub), financial technology companies (ERG), real estate (Alibaba), creative startups (Startup 360), virtual currency investment (BitConnect, IFan), e-wallets (PayAsian), social networks (HHLL, FutureNet), binary trading floors (Wefinex)...

Presenters at seminars use sweet talk to attract participants.

In Nghe An, since 2016, with the Bitcoin virtual currency fever in the world (Bitcoin is a rare virtual currency recognized by some countries and organizations in the world), many businesses based in Ho Chi Minh City, Hanoi... have quietly come to Nghe An to organize seminars, attracting people to invest in virtual currency, especially Onecoin virtual currency. This currency originates from Bulgaria, with a value that players set by themselves, each coin is about 0.2 euros, operating in a multi-level form, players will receive a "commission" if they attract participants.

The seminars were held at large hotels such as Muong Thanh Phuong Dong, Giao Te, Vinh Plaza, Muong Thanh Cua Lo… with hundreds of people attending. At these seminars, company staff often used “sweet” words to introduce the history of virtual currency, the need for electronic payments to replace paper money, and introduce successful people who invested in virtual currency in Nghe An.

Then if someone joins, they will guide how to create an account, how to invest.

In the province, most virtual currency players are concentrated in localities such as Vinh City, Nghi Loc, Hung Nguyen, Quynh Luu, Thai Hoa Town, etc. There are people who are investing billions of dong.

Nghe An Department of Industry and Trade also recommends that people and businesses not participate in these models, and rely on some characteristics to identify and be alert to fraudulent multi-level marketing in the technology era.

Accordingly, to identify fraudulent multi-level marketing in the technology era, it is necessary to rely on the following characteristics to be able to recognize such as:

- Request to purchase investment packages;

- No real products: The products of technology-scam multi-level marketing are front products such as: Virtual currency, Point accumulation, Investment funds...

- High interest rate promise: Now some types of multi-level marketing have transformed into the form of buying points to accumulate 100%, 200%..., however, these points are only valid in their system. When the system collapses, the money (points) of investors will disappear. Some current systems such as BBI Mall, MyAladdinz are typical examples (currently the BBI Mall system is almost unable to trade, investors cannot trade points for money as well as buy and sell BBI points).
- Give out flattering words and unbelievable stories to brainwash participants such as: "You don't need to do anything to get rich", "Just join for a while and it will be difficult for you to be poor", "Do you have a dream or desire to get rich", "The story of an ethnic boy who knows nothing about technology but got rich with MyAladdinz"...
- Organize seminars to share ways to get rich, take investors on overseas tours with their own money (without their knowledge).
- Branding: Multi-level marketing projects will cleverly use the names of famous people to brand their own (for example, My Aladdinz cleverly uses the images of famous people such as US President Donald Trump or Robert Kiyosaki - author of the book "Rich Dad, Poor Dad", to brand their brand and create prestige for investors.
- Recruit lower level agents to enjoy commission, the more levels, the more you enjoy.