Beware of pyramiding scams – DTI

By August 17, 2014Business, News

THE Department of Trade and Industry (DTI) has warned the public of proliferation of pyramiding scams purporting to be a networking organization.

Director Peter Mangabat of DTI-Pangasinan explained that networking is a legitimate multi-level marketing approach designed to generate business volume and income, while pyramiding is an illegal recruitment racket designed to defraud the people of their investment.

He stressed that compensation for the members of the network marketing organization comes from the profit generated by the marketing efforts of the members while pyramiding simply pays commissions from the cash collections paid by new recruits.

Mangabat said a participant in the networking business generates earnings for himself by performing any or all of the following tasks: (a) as a direct marketer of product and services; (b) as a supervisor of the people directly recruited by him; and (c) as a marketing manager of his entire network of marketing people from the first level up to the last.

In pyramiding, the task is focused mainly on the recruitment of new participants who are promised a high return without selling a product, said Mangabat.

He urged the public to report known pyramiding scams to the DTI-Pangasinan office located at the 2nd Floor of Star Building, Arellano Street in Dagupan City.

NO SOLICITATION

Meanwhile, DTI also warned the business establishments of individuals posing as the agency’s personnel soliciting advertisements.

Mangabat said his office is not engaged in any business activity, particularly solicitation of advertisements for any occasion. (PIA/April Montes)

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