As of the end of the third quarter of this year, there are 119 registered multi-level marketing companies in South Korea. The Fair Trade Commission (FTC) reported that while two new companies registered and two closed, it urged caution regarding companies that have terminated their consumer compensation contracts but have not ceased operations.
On October 28, the FTC released its report titled 'Key Information Changes for Multi-Level Marketing Companies in Q3 2026.' As of the end of September, there are a total of 119 registered multi-level marketing companies. Between July and September of this year, there were two new registrations, two closures, and four changes in business names or addresses, totaling eight significant information changes.
The two newly registered companies are Altovita and Rodem Korea. Altovita registered in Seoul on September 1 after signing a contract with the Direct Selling Compensation Association. Rodem Korea registered in South Chungcheong Province on September 3 after signing a contract with the Korea Special Sales Compensation Association.
In contrast, Celeb Korea and Putting Korea closed during the third quarter. Celeb Korea completed its closure report on August 26, while Putting Korea did so on September 30.
Four companies, including Karis, Unexsa Korea, LR Health & Beauty, and Amare Korea, changed their primary business addresses.
The FTC emphasized the importance of verifying the registration and status of multi-level marketing companies before engaging in transactions or becoming a salesperson. It specifically warned that companies that have not filed for closure but have terminated their consumer compensation contracts or debt payment guarantee contracts cannot operate normally. For instance, Ace One Global, a multi-level marketing company in the Gyeonggi region, had its compensation contract terminated in Q3, yet it has not reported any closure or suspension.
Multi-level marketing companies are required to establish compensation contracts with compensation associations or insurance contracts with banks or insurance companies to compensate consumers in case of damages.
The FTC also cautioned against illegal multi-level marketing schemes disguised as cryptocurrency analysis services. In one case, a consumer entered into a contract for a cryptocurrency analysis service and paid 14,055,000 won. However, the business demanded excessive member recruitment and provided inaccurate investment information. The consumer requested a cancellation and refund, but the business refused.
The regulatory authority explained that practices involving the solicitation of memberships under the guise of cryptocurrency analysis services, followed by demands for recruiting other members in exchange for commissions, could constitute illegal multi-level marketing. It particularly highlighted that demanding excessive membership fees or providing economic benefits for recruiting lower-level salespeople could violate direct sales laws.
The FTC urged consumers to verify the registration status of multi-level marketing companies and to ensure they receive and keep the compensation number notification when purchasing products. Key information about registered multi-level marketing companies can be found on the FTC's website under the 'Business Information Disclosure' section.
* This article has been translated by AI.
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