MLM investigations uncover Amway violations

January 16, 2017 | 19:24

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Amway has been found to have deviated from a number of prescribed procedures in its multi-level marketing (MLM) activities in Vietnam.

According to the investigation results publicised by the Ministry of Industry and Trade dated January 12, 2017, Amway Vietnam was unable to show evidence of informing some provincial Departments of Industry and Trade for the 3^rd, 4^th , 5^th, 6^th, and 7^th times that it changed its certificate of registration of MLM activities.

Failure to inform the departments is a violation of Clause 17 of Decree No.42/2014/ND-CP on state management of MLM activities. According to the clause, an MLM company can only operate in a locality after receiving confirmation from the local Department of Industry and Trade.

The company also trains its distributors online through the website www.welcome2amway.com, but does not have any concrete ways to ensure that the distributors are aware of the training content.

It runs ecommerce sites, including www.bodykey.vn, www.nutrilite.com.vn, and www.hotro.phonghopamway.com.vn, and allows distributors to order and pay online through the website amway2u.com.vn. At the moment of investigation, the company was asking for permission from Vietnam E-commerce and Information Technology Agency under MoIT to operate the websites.

In 2016, MoIT carried out a series of investigations of MLM companies in order to tighten state management of these activities. Many MLM companies had their licenses revoked and some voluntarily stopped operations.

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