DTI and NBI Now Investigating 15 MLM Companies for Possible Scam

DTI Advisory pyramid scam

Photo Credit: DTI/SEC

Two Philippine government agencies are now investigating more than 15 network marketing businesses or also known as multi-level marketing (MLM). This is after tons of Filipinos (especially OFWs) have been inquiring and sending their complaints regarding alleged pyramiding schemes across the country.

According to Narciso Cabriera, a representative of the Department of Trade and Industry (DTI), their department received more than 1,200 complaints from OFWs last quarter alone, regarding their membership on various MLM companies in the country and from different countries as well.

“That’s why we are working closely with the NBI (National Bureau of Investigation). But obviously, we cannot mention the names of these companies to avoid distraction in the on-going investigations. What we can only do now is to remind people to protect their hard earned money.” Cabriera told reporters on Thursday.

“You must understand that the main modus operandi of most pyramid schemes is this. They will let you earn first so they can easily convince you to invest more and invite others, then they will close the company and will start another company using a different name but with the same principle.” He added.

“Note that we are not only investigating the potentially pyramid scheme companies. We are also checking some legitimate MLM companies if they can still be able to sustain their business. It is very important that a networking business can always protect the money of their members.” Cabriera explained further.

Must Read: * Why You Still Make Good Money From a Networking Business Even If It Is a Scam

However, the DTI representative emphasized that MLM companies from other countries are more difficult to track. He said that most of them encourage their members to use social media (especially Facebook) to invite new members, and have pending fraud cases abroad that local members do not know.

As of posting, DTI and the Security and Exchange Commission (SEC) continue to spread information to the public about network marketing business and how to avoid scam. There are now more than 100 legal and legitimate MLM companies listed at SEC which can easily be checked through their official website.

For the DTI advisory, the public is being advised to stay away from “get-rich quick” and “easy money” schemes. The DTI said that if the offer is too good to be true, then it is probably not true. The company should also focus on selling valuable products instead of making money only from recruiting new members.

Besides being registered at SEC, MLM company members should also know the names of the owners of the company and should have a copy of their contract or membership. But more importantly, the company should follow all the rules declared by Republic Act 7934 or the Consumer Act of the Philippines.

Nonetheless, the DTI said there’s nothing wrong in joining MLM as long as it is a legitimate company and has a back-up plan to return the money of their members in case problems occur. The DTI also recommends using the Internet in making a thorough research before joining any network marketing business.

Lastly, the agency reminded the public about the sad stories of members of Aman Futures, which allegedly have victimized thousands of Filipinos in Visayas and Mindanao, including policemen. The said group was founded by Manuel K. Amalilio, with the company promising doubling P50,000 in just 20 days.

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