In a news briefing yesterday, Direct Selling Association of the Philippines president Joey Sarmiento said only strict laws would prevent the proliferation of companies engaged in pyramid schemes.
Sarmiento said there should be a law to strengthen the power of regulatory authorities in stopping the operations of pseudo-investment and pyramiding schemes.
He said the DSAP fully supports the bills filed at Congress and the Senate, seeking to impose tougher sanctions against entities engaged in pyramid schemes.
"We’re hoping that these bills are passed the soonest possible time. These will give more teeth to the implementing rules and regulations of the regulatory agencies," Sarmiento said.
"The key to stop these unscrupulous companies from victimizing more people is to prevent them from doing business at all. There should be stricter laws and guidelines on start-up companies to stop would-be scammers from even registering their businesses," Sarmiento said.
Chinkee Tan, project coordinator of Prudentialife Plans Inc.’s marketing arm Millionaires in Business, said imposing stiffer laws would also erase the stigma that the recent pyramiding scandal has brought on the industry.
"The whole industry has been unfairly dragged into the scandal. It does not mean that if there are some scammers in the business, the whole industry is composed of scammers. That would be most unfair," Tan said.
Sarmiento said that while the recent scandal has not significantly affected the sales of direct selling companies, their businesses have not been growing that much either.
MLM is a fast-growing industry with a worldwide sales of $79 billion, employing roughly 44.6 million people. In the Philippines, it has an estimated sales of $298 million and employs about two million people.
The bill pending at the House seeks to amend the definition of "chain distribution plan or pyramid sales scheme", and clarify the activities and operations that would identify an entity as pyramiding operator.