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Complaints vs online pyramid schemes more than double
In a statement yesterday, the DTI said a total of 28 complaints on chain distribution plans or pyramid sales schemers were received from consumers and investors by the Fair Trade Enforcement Bureau as of April this year, up from just 12 complaints last year.
STAR/KJ Rosales, file

Complaints vs online pyramid schemes more than double

Louella Desiderio (The Philippine Star) - June 16, 2021 - 12:00am

MANILA, Philippines — The Department of Trade and Industry (DTI) is advising the public to be cautious of chain distribution plans or pyramid sales schemes circulating online as complaints involving such received by the agency have more than doubled as of end-April.

In a statement yesterday, the DTI said a total of 28 complaints on chain distribution plans or pyramid sales schemers were received from consumers and investors by the Fair Trade Enforcement Bureau (FTEB) as of April this year, up from just 12 complaints last year.

Chain distribution plans or pyramid sales schemes involve deriving profit mainly from recruitment of other people to invest in the plan, rather than from the sale of consumer products.

The DTI said many of the schemes are being spread online, particularly sites like Facebook, Instagram and YouTube.

Citing the investigation conducted by the Securities and Exchange Commission (SEC), the DTI said companies offering the schemes are focused on recruitment instead of encouraging existing members to sell more products or services to consumers with a promise of quickly getting a return on investments.

To get more individuals to invest in the scheme, the DTI said the companies also make claims that the business model is resilient to the ongoing pandemic.

Under Article 53 of Republic Act 7394 or the Consumer Act of the Philippines, chain distribution plans or pyramid sales schemes are prohibited from being employed in the sale of consumer products.

The DTI, which has vowed to take action on the complaints, is encouraging the public to report such schemes to the agency.

“Victims of these fraudulent acts have the right to seek redress from the SEC or the DTI. Our doors are always open to assist and guide them in addressing their complaints,” DTI-Consumer Protection Group Undersecretary Ruth Castelo said.

“Those companies taking advantage of consumers by disguising their pyramid sales scheme as a legitimate business opportunity in the form of multi-level marketing have to be investigated, charged, and penalized if warranted,” DTI assistant secretary Ronnel Abrenica said.

To report businesses that offer chain distribution plans or pyramid sales schemes, customers can call the 1-DTI (1-384) hotline or send an email to consumercare@dti.gov.ph.

DEPARTMENT OF TRADE AND INDUSTRY
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