CAGAYAN DE ORO CITY (PIA) — The Consumer Protection Division of the Department of Trade and Industry (DTI) in northern Mindanao continues to elevate awareness of the dangers posed by pyramid schemes, urging consumers to remain vigilant against deceitful business practices.
Lawyer Fel Lester Brillantes of the DTI regional office emphasized that the recruitment of members, often referred to as “downlines,” serves as a crucial red flag indicating the presence of a pyramid scheme.
“The Consumer Act states that you can see it as a pyramid scheme because the emphasis is on recruitment rather than the selling of goods, products, or services,” Brillantes explained.
He highlighted the distinction between legitimate multi-level marketing (MLM) companies and pyramid schemes, noting that while MLMs focus on product sales, pyramid schemes prioritize recruiting new participants with promises of lucrative returns.
Brillantes further underscored the importance of scrutinizing business enterprises and their products before investing, cautioning that some entities may disguise pyramid schemes as MLMs to exploit consumers.
He stated that examining the business enterprise marketing and compensation plan can reveal the business structure by ensuring that earnings are based on the sold product rather than the number of recruits.
To combat fraudulent practices, Brillantes said the DTI has also launched the Seal of Legitimacy program, which distinguishes legitimate MLMs from dubious operations. A committee comprising legal and industry experts from DTI’s Consumer Protection Group, Fair Trade Enforcement Bureau, and Digital Operations Group evaluates business enterprises engaged in direct selling (DS) and MLM, granting the seal to those that meet stringent criteria.
A network of government agencies tasked with implementing consumer-related laws and performing consumer protection functions, the Consumer Network (ConsumerNet) convenes every quarter to discuss pressing consumer-related concerns. The first quarter meeting tackled not only the pyramid scheme but also illegal real estate practices.
Representatives from Bangko Sentral ng Pilipinas (BSP), Bureau of Customs (BOC), Bureau of Fisheries and Aquatic Resources (BFAR), Civil Service Commission (CSC), Department of Agriculture Regional Field Office (DA RFO), Department of the Interior and Local Government (DILG), National Telecommunications Commission (NTC), Philippine Information Agency (PIA), Philippine National Police Anti-Cybercrime Group (PNP-ACG), Securities and Exchange Commission (SEC), as well as DTI-10 and DTI Misamis Oriental, attended the event. (APB/PIA-10)
