DTI cautions public versus pyramid schemes disguised as direct marketing

Trade and Industry Undersecretary Adrian S. Cristobal cautioned the public anew yesterday against pyramid schemes disguised as direct marketing activities.

He also warned companies involved in such schemes that the government is ready to impose sanctions on them should their marketing plans turnout to be pyramiding schemes.

The DTI issued the warning due to continuous inquiries about certain "direct-selling companies."

According to Cristobal, "we have noted a rise in the inquiries on the business activities of certain companies. We have also been receiving request from our embassies abroad, especially in countries where we have a lot of overseas Filipino workers, to verify the business operations of certain companies."

Cristobal assured that the DTI is "gathering information on these entities to determine whether they are engaged in pyramiding or not."

The DTI, he added, has submitted the names to relevant agencies like the Securities and Exchange Commission (SEC) to do a thorough background check.

The DTI, furthermore, Cristobal said, is also checking with industry associations to ascertain the legitimacy of the suspected companies’ business operations.

Cristobal urged those being recruited to join multi-level selling schemes to first check with the SEC or the Direct Selling Association of the Philippines regarding the credibility of the companies they are applying with.

Cristobal appealed to consumers to be wary of companies that promise immediate return of investments or earning through recruitments and selling of products that are too expensive.

Cristobal pointed out that get rich quick scams often rely on maintaining a chain of recruitment to keep on earning.

The DTI is ready to hear complaints and inquiries on suspected pyramiding companies through the DTI hotline 8977-DTI or they can text 2920 or e-mail at [email protected].