The Department of Trade and Industry (DTI) yesterday said it has noted a sudden rise in complaints against entities engaged in pyramiding sales schemes using social media platforms.
In a statement, DTI Undersecretary Ruth Castelo said chain distribution plans or pyramid sales schemes are circulating online and are now heavily marketed or promoted on Facebook, Instagram, and YouTube.
These schemes tend to focus more on the recruitment of new potential members rather than encouraging its members and franchisees to actually sell products and services to consumers accompanied with promise of high returns of investment in a short period of time. Further, they claim that this business structure is pandemic proof to make more enticing and promising to interested investors.
Castelo said s of April 2021, the DTI has received 28 complaints regarding these schemes from consumers and investors. This number increased more than two-fold from 12 reported complaints received last year.
Castelo said Article 53 of Republic Act 7394 or the Consumer Act of the Philippines clearly provides that chain distribution plans or Pyramid Sales Schemes, such as deriving profits primarily or mainly from recruitment of participating members and not from the marketing and sales of products and services shall not be employed in the sale of consumer products.
