Is visa on arrival a scam or legit?
Visa on arrival is legitimate and posted in Vietnam immigration laws: http://www.mofa.gov.vn/vi/ct_lanhsu/vbpl/nr040831084533/copy2_of_ns040830162648 - so it is endorsed by the Vietnamese Government.
Why the embassy told me that it is not legit and a fraud while it looks legit?
After reviewing and interviewing some travel agents who processed this visa, our guess is that this visa compete directly with the embassy services, that is why they will never recognize this visa as legit procedure even though it is posted clearly in Immigration Laws of Vietnam. We will report it to Vietnam tourism Administration since visa on arrival may be one of the key factors help boosting Vietnam tourism.
Legally issued by Vietnam Immigration Department, it has been online for almost 7 years and increasingly becomes the most convenient way to get a visa to Vietnam.
Guidance for Vietnam visa
Vietnam visa getting at Embassy
Vietnam visa getting on entry