DTI strengthens drive vs pyramiding, chain marketing schemes
CEBU CITY, Philippines — The Department of Trade and Industry (DTI) has tightened regulations on those doing networking and multi-level marketing amid concerns raised regarding the sale of products using pyramid sales schemes in the guise of legitimate multi-level marketing.
On Tuesday, October 15, DTI conducted a public consultation on the draft administrative order (DAO) on pyramiding schemes.
Under the draft DAO, any person, natural or juridical, “who intends to establish, operate or advertise a legitimate direct-selling multi-level marketing or networking company” will be required to undergo a mandatory recognition process.”
Applicants for the mandatory recognition are required to submit a DTI-prescribed application form to the agency’s Fair Trade Enforcement Bureau or to regional or provincial office concerned together with supporting documents.
The requirements include the applicant’s business permit, map of location of business or website surety bond, certificates of no pending criminal, civil or administrative cases, and clear copy of marketing scheme or mechanism.
The DTI office concerned will evaluate the application and documents submitted within the day.
If the applicant meets the requirements and after payment of fees, DTI will issue the recognition certificate within seven working days from receipt of the application.
According to the draft order, the following are some of the indicators of pyramiding schemes:
– Profit or commission conditioned on recruitment of participants in a scheme;
– The person recruited is required to pay a fee;
– Unusually high returns on investment bin the form of profit or commission over a short period of time;
– Where a consumer product is involved, the price is unreasonably high that a consumer would not normally buy, sit the participant is forced to recruit; and
– No policy on return, refund, exchange or warranty.
Emma Panopio, chief of DTI surveillance and monitoring division, and Perpetual Werlina Lim, chief of DTI consumer trade and policy division, consumer protection and advocacy bureau were around to answer questions about the DAO.
Lim said all the inputs generated during the public consultation will be taken into consideration in the final DAO.
According to DTI, administrative sanctions will be imposed on those found to be using prohibited marketing plan or scheme.
Aside from administrative fines, there will be cancellation of business name registration ans a recommendation to local government units and agencies concerned for the revocation of business registration, permit, license accreditation, and recognition.
The draft memorandum also calls for the creation of a task force composed of relevant agencies such as the Securities and Exchange Commission, Bangkok Sentral ng Pilipinas and the Insurance Commission as well as stakeholders from the private sector. / celr
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.