THE VOLUME of pyramid scheme complaints filed in the four months to April had more than doubled the full-year total for 2020, the Department of Trade and Industry (DTI) said.
Complaints involving pyramid schemes totaled 28 as of April, as opposed to the 12 filed in 2020, the DTI said in a statement Tuesday, citing its fair trade enforcement bureau.
Pyramid schemes mainly make profits from recruiting more members rather than product sales.
“They claim that this business structure is pandemic-proof to make (it) more enticing and promising to interested investors,” the department said.
The DTI warned the public to avoid such schemes currently being promoted on social media platforms like Facebook and Instagram. Victims can report the schemes to 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,” DTI Assistant Secretary Ronnel O. Abrenica said.
The SEC has said that Ponzi schemes, pyramid schemes, and so-called boiler room operations — the use of high-pressure sales tactics to sell penny stocks — are the most common investment scams. Such schemes 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, imprisoned or both. — Jenina P. Ibañez