The Ministry of Industry and Trade has started inspections of seven companies involved pyramid schemes following recent fraud cases.

They will carry out inspections at seven companies, including Unicity Marketing Vietnam Company and Amway Vietnam Company, while raising awareness over pyramid scheme scams among the public. Pyramid selling is a marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit.

Taking advantages of this strategy, some companies cheat money from their salespeople. The inspection is a result of several such recent cases.

In early March, the northern province of Bac Ninh's police prosecuted Nguyen Thi Thu, chairwoman of Viet Phat Development and Trading Investment JSC, for fraudulently appropriating assets through an apparent pyramid scheme.

The company had not been granted a licence for multi-level trading but still set up a supplementary product multi-level trading network. Thu claimed that several senior state officials and press editors were involved in her company. Believing her false claims, many people borrowed money to join the company but they never received the promised commission. Thu successfully lured in 500 people and appropriated VND20bn.

In February, Lien Ket Viet Company was accused of swindling nearly 95.2 million dollars from 45,000 people by faking a prime ministerial certificate of merit and fraudulently claiming to be a company owned by the Ministry of Defence.