Many cashback websites and apps in Vietnam are indulging in illegal multi-level marketing, the Vietnam Competition and Consumer Authority (VCCA) under the Ministry of Industry and Trade has warned.
Cashback websites and apps pay their users a percentage of the money earned when they purchase goods and services via affiliate links, bank cards or digital wallets.
“Cashback is a business-to-consumer e-commerce model that enterprises and service providers use to increase customer loyalty and reach out to more customers by offering users a reward when they make a purchase or refer new customers to the cashback websites or apps,” a representative of the VCCA said.
Although the cashback model has recently emerged popular, the VCCA has found that many cashback websites and apps in the country have shown signs of multi-level marketing and nontransparent operations.
Some cashback websites and apps lure users with rewards equivalent to 80-100 percent of each purchase they make. However, the reward is mostly presented in points and the users receive only a fraction of the reward in cash.
Besides this, the accumulation points of some cashback websites and apps are related to certain types of cryptocurrency or e-wallets such as Gem, CBP, Silling, USDT, ETH, ONE and VNDC, which are not recognised by the Vietnamese law. Therefore, consumers will not be protected by the law in case of disputes.
Some cashback websites and apps also invite users to upgrade their accounts to a higher level such as Silver, Gold, Platinum, Diamond, Global Executive Commission or Millionaire to enjoy higher benefits.
To avoid legal and financial risks, the VCCA suggested that consumers should not become members of cashback websites and apps that indulge in one of the activities listed above.
