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On the May 8th 2025 , the Fair Trade Commission (FTC) announced that it has decided to file a criminal complaint against the company and its CEO for violations of the Door-to-Door Sales Act. A corrective order has also been issued.
Riman Korea sells cosmetics such as Incellderm and Botalab and has a sales force of over 83,000 individuals. As of the end of last year, the company reported 174.7 billion KRW in sales, making it the 7th-largest multi-level marketing (MLM) business in South Korea by revenue.
The company is accused of operating in a multi-level marketing format between March 2020 and November 2024, while only being registered as a door-to-door sales business supporter, not as an official MLM business.
Riman Korea structured its sales organization in more than three tiers: from education agency branch managers to agency heads, power managers, managers, sales planners, and planners.
Investigations found that the company paid sponsorship commissions to branch managers and agency heads based on the performance of all subordinate salespeople.
This structure exceeds the one-level limit for commission payments allowed under door-to-door sales regulations, which is not permitted for companies registered solely as door-to-door sales supporters.
Compared to MLM businesses, door-to-door support businesses are subject to looser regulations — they are not required to meet capital requirements, and if over 70% of their sales are to end consumers, they are exempt from obligations such as consumer compensation insurance, commission caps, and product pricing regulations.
Ultimately, Riman Korea registered as a multi-level marketing business at the end of last year, while still under investigation by the FTC.
The company claimed it was unaware that its sales structure required registration as an MLM business.
Additionally, the FTC found that Riman Korea had allowed salespeople who joined under someone else’s name to change the registered name and continue operating — effectively enabling unregistered individuals to act as salespeople.
Riman Korea applied for a consent resolution (a system allowing the case to be closed if a reasonable corrective plan is proposed) in April last year, but the application was rejected.
The FTC stated:
“This is a case where a door-to-door support business was sanctioned for paying sponsorship commissions in a multi-level marketing manner,” adding,
“It is significant in that it raises awareness of legal compliance within the industry and contributes to establishing a fair trade order.”