DTI: No negligence vs networking firms

The Department of Trade and Industry snaps back at a senator’s gripe yesterday, maintaining that it has been doing its job in running after fraudulent multi-level marketing firms.

Senator Raffy Tulfo claimed DTI has been eluding him for answers in the past years when citizens asked for his help after being duped by bogus companies.

During the virtual organizational meeting of the Committee on Trade, Commerce and Entrepreneurship at the Senate on Monday, Tulfo grilled the DTI for its being elusive. Tulfo said that, through his radio program, he had repeatedly asked for assistance for victims who go to him to ask for help after being victimized by bogus multi-level marketing firms.

“You even assign me to personnel who are not decision-makers. Try to elude me right now, and you’ll see! I promised my constituents that I will air their sentiments to government agencies once I win the senatorial race. And this is my time,” the seemingly irate Tulfo said.

“I suggest that you look for ways to ensure that these fraudulent multi-level marketing and networking companies would not continue to increase, especially during the pandemic, by promising big bucks or better futures to the Filipino people,” Tulfo added.

Answering his tirades, DTI Consumer Protection Group chief, lawyer Ruth Castelo said the agency has been coordinating with law enforcers to run after erring multi-level marketing firms.

“We are working with the Securities and Exchange Commission where we get the information and which is the proper agency to advise DTI if companies are legitimate. We even signed a memorandum order in the previous administration regulating the practice of multi-level marketing companies,” Castelo said.

Last February, DTI issued Department Administrative Order 21-09, or the Guidelines on the Grant of the DTI Seal of Legitimacy for Legitimate Direct Selling and Multi-Level Marketing.

Under the DAO, companies engaged in legitimate direct selling and multi-level marketing may be granted a seal “that will serve as a mark distinguishing them from among those with questionable practices.”

Not ponzis

With the “seal of legitimacy,” the DTI said it hopes to protect the public from becoming victims of companies employing chain distribution plans or pyramiding scams that are prohibited under Article 53 of the Consumer Act of the Philippines or Republic Act 7394.

The DTI, last year, admitted that victims of pyramid scams doubled in June 2021 compared to the same period in 2020, as these scammers make profits from recruiting more members rather than product sales.
Under Article 53 of Republic Act 7394, pyramid schemes in selling consumer products are banned and are punishable by imprisonment or fines.

PNP, NBI as partners

Tulfo likewise challenged the DTI to step up its efforts to scrutinize and regulate fraudulent companies which seek accreditation and thus victimize more individuals.

“It’s about time that you ensure that companies stop dominating markets, especially online. It is also time that you start coordinating with law enforcement agencies such as the NBI (National Bureau of Investigation) and the PNP (Philippine National Police) and that you all work together to stop these companies from scamming people,” Tulfo said.

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