TAGBILARAN CITY, October 1 (PIA)--In this age of multi-level marketing, networking and pyramiding which often ends up as scams, a consumer rights advocate gives a hint: if you get rewards from simple registrations, it is pyramiding.
Jose Hibaya, Department of Trade and Industry Bohol consumer services division chief shared that even if there is a product that is being sold or you bought some as investments, the quick money scheme is a tell tale sign that you are in for a dupe.
Speaking at the Kapihan sa PIA Thursday commemorating the Consumer Welfare Month in October, DTI also said that pyramiding and networking companies are technically not in their sphere, because the office is largely tasked to look into single proprietorships, and not corporate entities.
Single proprietorships are locally registered, so there is a better chance for the DTI to keep track of their operations and stop them before these companies could dupe more and more innocent consumers and investors.
Simple sign it is pyramiding, Hibaya illustrated is when by simple registration of your recruits, you get money, or often packaged as commission of product sales.
Although many people defend pyramiding or multi-level marketing, the fact is when you saturate a market with recruits, that is when the base collapses, leaving those at the bottom with nothing while unnecessarily enriching those on the top lines, even if they just sit and relax, a scammed pyramiding shared her experience.
I was asked to put up P3,500, promising that I can get back the amount in a week's time, she added.
She was a victim of a fraudulent investing scam promising high rates of return with little risk to investors, an investment counselor who asked not to be named said.
This is classic Ponzi scheme which generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors, he added.
Over this, he said, "When it is too good to be true, don't," meaning on investment scheme like the one above.
People however are so lured to sweet words and the promise of returns, hefty amounts even with the investor hardly doing anything.
"Of course, when you let go of your money and invest, you have just forfeited your right to information and you just lost the chance to get back the money," the investment guru told.
The DTI said this year's Consumer Welfare Month picks Consumer Protection in the ASEAN Economic Community. (rac/PIA-7/Bohol)