Bangladesh Bank (BB) has warned people against investing in multilevel marketing (MLM) companies highlighting their offering excessive returns on deposits, stating that such activities fall under money laundering, reports BSS.
The central bank is also investigating alleged fraudulent activities in this regard, the BB said in a circular on Monday.
BB mentioned that such investment schemes promise unusually high returns while seeking deposits or investments from the public.
Pyramid and Ponzi schemes are major features of multilevel marketing companies, which are highly risky as investors can lose their money, the circular said.
The BB cited previous scams such as Jubok, Destiny and recent e-commerce scams involving firms such as Evaly, where people were lured by offers of attractive profits and unrealistic discounts.
It said these fraudulent models do not generate legitimate profits. Instead, they shift money between investors until the scheme collapses. When that happens, most participants lose their investments.
The central bank emphasized that only licensed financial institutions can legally collect deposits.
Violating this regulation is a punishable offence under the Bank Company Act, 1991, the BB said.
Bd-pratidin English/Tanvir Raihan
