DTI reports 28 complaints of pyramid schemes as of April; already more than double the entire year of 2020

According to the Department of Trade and Industry’s (DTI) fair trade enforcement bureau, the number of pyramid scheme complaints filed in the first four months of the year exceeded the entire 2020.

Complaints involving pyramid schemes have totaled 28 as of April; there were 12 filed in 2020.

Pyramid schemes typically make profits by recruiting more members instead of actually producing sales.

“They claim that this business structure is pandemic-proof to make it more enticing and promising to interested investors,” said the DTI.

The DTI warned the public to avoid such schemes currently being promoted on social media platforms like Facebook and Instagram and that people can report suspects to either the DTI or the Securities and Exchange Commission (SEC).

“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,” said Ronnel O. Abrenica, DTI Assistant Secretary.

According to the SEC, Ponzi schemes, pyramid schemes, and “boiler room operations,” or the use of high-pressure sales tactics to sell penny stocks, are the most common investment scams and have increased during the pandemic as more Filipinos lose their jobs.

Pyramid schemes to sell consumer products are banned under Article 53 of Republic Act 7394 or the Consumer Act of the Philippines. Violators are liable for fines, imprisonment, or both.

SOURCE: Business World