Bangladesh Bank has cautioned the public against multi-level marketing (MLM) schemes, highlighting their hallmarks—unrealistically high profits and referral-based commissions—as traits of pyramid or Ponzi schemes that often lead to significant financial losses for investors.

The central bank issued the warning on Sunday, March 9.

The statement noted past instances where entities in Bangladesh defrauded customers by collecting deposits or investments illegally, promising exorbitant returns and commissions, or offering products at steep discounts via e-commerce platforms.

“Such fraudulent activities fall under money laundering laws and are punishable offenses,” the bank said, referencing prior legal actions.

It added that collecting deposits without a Bangladesh Bank license violates Section 31(1) of the Bank Companies Act, 1991.

Amid recent reports of similar scams, the central bank said investigations are underway.

“To protect customer interests, we urge the public to avoid transactions with such entities and exercise caution,” the warning said.

It also called on citizens and the media to report any known MLM operations to Bangladesh Bank for further action.