Pyramid Scheme Hits Vietnam Tourism Scene

by Dwight

It was only a matter of time.  Local Vietnamese have become victims of a pyramid scheme, also known as “multi-level marketing.”  Tourists should be aware that they may soon become the target of such an enterprise.  The dollar amount – US$275.00 – revealed in the article below may sound attractive to foreign travelers.

The description of the tour – number of days, accommodations, and attractions – is not available.  A week-long organized tour of Vietnam at that price would sound like a pretty good bargain.  The problem is:  there are no tours.  And no financial reward either.

Many travelers to Vietnam express a desire to return and this may expose them to such a scam.

Don’t fall victim.  Just say NO!

Read on:

Multi-level tourism booming, management agencies getting embarrassed

VietNamNet Bridge – A new model of tourism has appeared in Vietnam – multi-level tourism, a kind of pyramid marketing. The problem is that the new model has not been put under the control of state management agencies, because it is unfamiliar in Vietnam.

Dwellers in HCM City, Hanoi, big provinces and cities like Tay Ninh, Nha Trang and Quang Tri, have been attracted by new way of making money and traveling: they do not need to trade products. They just need to buy a tourism package to become the members of a company. Then they introduce other members to the company to get awards – cash and the trips abroad.

However, in fact, it is not so easy to earn money.

The “perfect service”

When Nguoi lao dong’s reporters came to the representative office of “D Company” headquartered in Tan Binh district in HCM City, they met “N”, who introduced himself as the head of a division of the company, which is a subsidiary of a group in the US. N said that the company is offering a “perfect service” which allows clients to do three things – traveling, doing business online and working from home.

According to N, once registering a tourism service package worth 375 dollars, clients would get an electronic invoiced issued by the parent company in the US and a personal account which allows him to join the system. The clients would have the opportunities to get rewards in cash, or they would be able to travel abroad. Also, they could also receive big awards including cars or villas.

Especially, the rewards would be increasing step by step depending on the number of members the client can introduce to the company, from 1000 dollars to 15,000 dollars. Also, he could also enjoy attractive commissions which are equal to 5-13 percent of the sums of money paid by new members.

Several days ago, a series of state management agencies, including the HCM City Planning and Investment Department, the HCM City Taxation Sub-department, and the Ministry of Culture, Sports and Tourism, received the complaint from a person, who joined the multi-level tourism network and said that she has been swindled.

Oanh, the person, said that she paid money to become a member of “T Company” because she hoped she could earn money and travel free of charge. The company told Oanh that a client just needed to pay 275 dollars to book a tour and become a member of T Company. Since Oanh also successfully persuaded some friends to become the company’s members (7 seats in total, who paid 1925 dollars), hoping that she would get the reward in cash, worth from 500 dollars to 10,000 dollars.

However, Oanh later realized that T Company does not have legal status to provide outbound tours, Oanh asked the company to pay money back. After many times of failing to claim back the money, Oanh came to the head office of the company in district 2 in HCM City and realized that this is the office of another company, while the director has vanished into the air.

The new tourism model has also been developing rapidly in Hanoi. A lot of companies have been set up which organize tours for clients, provided that the clients pay initial sums of money to become members of the companies. The members then can either to travel free of charge or purchase products at the price discount of 50 percent.

Management agencies: no such a company has been licensed

The common thing of all the companies is that they are operating under the mode of multi-level marketing.

Lawyers say that by selling service packages, the companies can mobilize big sums of capital for which they do not have to pay interests. They use the money paid by new comers to pay to the old members. In case the companies appropriate the big sums of money and disappear, clients will suffer complete loss.

D Company has advertised that it has had 70,000 members nationwide and 10,000 members in HCM City. Meanwhile, both the HCM City Planning and Investment and the HCM City Department of Industry and Trade have affirmed that they have not granted any licenses to the companies of this kind.

Meanwhile, the HCM City Department of Industry and Trade has admitted that this is an unfamiliar business model which makes it difficult for stage agencies to manage them.

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