Fraud Prevention in MuLti-LeveL Marketins Business in ThaiLand

Abstract

The purposes of this research were (1) to study type of fraud in the muLti-LeveL marketing business, (2) to study method of fraud in the muLti-LeveL marketing business, and (3) to study appropriate anti-fraud measure to prevent possibLe fraud in the muLtiLeveL marketing business. ConceptuaL framework was based on fraud triangle, Committee of Sponsoring Orsanizations of the Treadway Commission, internaL controL (COSO IC), and corporate sovernance. SnowbaLL sampling technique was applied to seLect 5 Chief Executive Officers of muLti-LeveL marketing business to answer seLf-reported questionnaire for qualitative research. Stratified random sampling technique was applied to seLect 1,564 empLoyees of muLti-LeveL marketing business to answer seLf-reported questionnaire for quantitative research. Data was anaLyzed by Pearson's correLation, Chi Square test and logit model. Research flndings reveaLed that: (1) types of fraud were asset misappropriation, embezzLement, and pyramid schemes, (2) methods of fraud were contributions to public cremation service, investment, currency exchange, making dream for capitaL raisins for listing, foreign exchange as incentives, faLse claim of undue influentiaL persons, saLe of sacred items, misuse of sociaL media to Lure university student and new members, agricultural product fund, and products faLseLy claiming medicaL treatment properties for various diseases, and (3) good internaL controL and good corporate sovernance couLd prevent fraud in direct saLes business up to certain LeveL, therefore, other fraud prevention measures are recommended i.e. corporate cuLture or software for fraud investigation.