SOURCE: PIA CDO
CAGAYAN DE ORO CITY has recently become a hub of bustling business activities. With this growth, however, comes the shadow of deceitful business practices. The Consumer Protection Division of the Department of Trade and Industry (DTI) in northern Mindanao is tirelessly working to elevate awareness about the dangers lurking in the form of pyramid schemes. Their message is clear: Consumers must remain vigilant.
Lawyer Fel Lester Brillantes from the DTI regional office offers a crucial insight into the pyramid schemes: the recruitment of members, often referred to as "downlines". This, he explains, is a glaring red flag, indicating the presence of a pyramid scheme. According to the Consumer Act, the emphasis on recruitment rather than selling goods, products, or services, reveals the true nature of such a scheme.
Brillantes makes a critical distinction between legitimate multi-level marketing (MLM) companies and pyramid schemes. While MLMs focus on product sales, pyramid schemes prioritize recruiting new participants with promises of lucrative returns. This is a significant difference that consumers need to be aware of to avoid falling prey to such schemes.
Brillantes warns consumers about entities disguising pyramid schemes as MLMs to exploit them. He emphasizes the importance of scrutinizing business enterprises and their products before investing. Checking the business enterprise marketing and compensation plan can reveal whether earnings are based on the sold product or the number of recruits.
To combat fraudulent practices, DTI has launched the Seal of Legitimacy program. This program 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. The seal is granted to those that meet stringent criteria.
A network of government agencies, ConsumerNet, performs consumer protection functions and implements consumer-related laws. This network convenes every quarter to discuss pressing consumer-related concerns. The first quarter meeting tackled not only pyramid schemes but also illegal real estate practices.
Representatives from various sectors attended the meeting. These included the 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), and more.
The Philippine Information Agency (PIA) and the Philippine National Police Anti-Cybercrime Group (PNP-ACG) were also present. Their attendance underscores the importance of digital literacy in the fight against pyramid schemes and other fraudulent practices.
The Securities and Exchange Commission (SEC) plays a crucial role in monitoring and regulating pyramid schemes. Their presence at the meeting further emphasized the importance of their role in maintaining business integrity and protecting consumers.
As CAGAYAN DE ORO CITY continues to grow, the DTI and other government agencies remain vigilant in their mission to protect consumers from pyramid schemes. Their message is clear: Consumers must remain vigilant, scrutinize business enterprises before investing, and stay informed about the distinction between MLMs and pyramid schemes.
Always remember, not all that glitters is gold. Beware of the pyramid mirage.
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