Beware of the pyramid scheme
April 13, 2004 | 12:00am
There’s the food pyramid, there’s the inverted pyramid in newswriting, and then there’s the pyramid scheme, which is the object of an intensified crackdown by the Department of Trade and Industry under Secretary Cesar Purisima.
Says Undersecretary for Consumer Welfare and Supervising Undersecretary for Legal Affairs Adrian Cristobal Jr., "We are strengthening our fight against pyramiding by tapping the legal expertise of the different DTI agencies to help our DTI regional/provincial arbitration officers evaluate and prosecute, if needed, certain cases."
According to Cristobal, there have been a rising number of inquiries on pyramiding even from embassies abroad, meaning that pyramiding has spread to other countries where there’s a big population of Filipino overseas workers.
Given the hard times, the promise of fast and easy money is the reason why the pyramid scheme is so popular. The rewards of joining and investing in the company, which are dangled in front of you like the proverbial carrot, are hard to resist. The truth is, those at the bottom of the pyramid never get back their investments. When the pyramid reaches its saturation point, it collapses because members are unable to recruit new members. While the company heads earn tons of money from investors (some of the uplines earn a fortune ), the downlines (majority) will just have to kiss their money goodbye.
Likewise, the DTI would like to make consumers aware of the difference between illegal pyramiding and legitimate direct selling/multi-level marketing (like Avon, Amway, etc.) to avoid deception. Read this and be forewarned/forearmed: Legitimate MLM/networking or direct selling involves the sale of products to earn compensation. Uplines earn commission from the sales of their downlines, not from their investment or joining fees. Joining these companies entail hard work, dedication and perseverance. Pyramiding schemes involve recruiting people who will, in turn, make the same investments as the recruiter, and will receive compensation in the same manner as his/her recruiter. Basically, here’s how this illicit operation goes: Applicant invests X amount of money. This money multiplies exponentially by virtue of the number of downlines he gets. He is, in fact, earning from the investment of other people. Under this scheme, investors are supposed to do nothing but invite people to join while waiting for their money to grow.
Be very wary, too, of pyramiding companies who also have products up for sale. Most pyramiding companies claim to be legitimate MLM/networking companies.
Together with the Direct Selling Association of the Philippines, DTI is embarking on a massive information and education campaign for the general public. Also being planned is a joint DTI-DSAP Secretariat to address complaints and inquiries on pyramiding.
The DTI hotline to call is 8977-DTI. Inquiries can also be sent through text via 2920. Or send e-mail to i-reklamo@dti.gov.ph.
Dear Consumerline,
We’ve been feeding our one-year-and-eight-month-old son with am (uncooked ground rice) mixed with his milk (Neslac with honey). However, I heard from some mothers that it makes the teeth weak. How true is it?
– MARICHELL
GAPASIN-NAPAT
Kidapawan City
Now, here’s the tooth and nothing but from family doctor Jeepy Perez: "Rice milk and honey can be broken down to simple sugars in the mouth. Sugar in infant milk can be destructive if it is kept in the mouth of the infant who falls asleep with the bottle in his mouth. Babies who are bottle-fed have difficulty in developing proper musculature of the face."
Dear Consumerline,
As a diabetic, I find the ad of Fiesta Pancit Ulam alarming.
It shows an obese man heartily digging into his plate of rice and noodles, saying that the noodles are so good, "mapapa-kanin ka sa sarap."
The punchline is: He reaches off-camera for a big bowl full of rice, dumps it on his plate, then justifies it by saying, "Bakit, one rice pa rin naman ah?," then goes on to gobble up the food.
Today, obesity is a fast-rising health concern, and diabetes is on its way to becoming one of the top five killers of Filipinos.
Note the increase in patients seeking liposuction, stomach-stapling surgery, memberships in gyms, all in a bid to lose weight and stay healthy.
Ask any endocrinologist and they will say that they’re seeing younger and younger patients with type 2 diabetes. In its December 9, 2002 issue, Time magazine bannered diabetes as becoming a regional epidemic in Asia.
Against this backdrop, ads like these do nothing to promote good health. If anything, the absence of fruits and vegetables on the man’s plate shows a glaring lack of knowledge about proper nutrition and having a balanced diet.
I wish that copywriters, creative directors, and even clients of this kind of product would take pains to come up with truly responsible advertising, one that would not pose harm to consumers’ health.
– ALARMED CONSUMER
If there’s something bugging you and you think we can help, e-mail us at ching_alano@yahoo.com.
Says Undersecretary for Consumer Welfare and Supervising Undersecretary for Legal Affairs Adrian Cristobal Jr., "We are strengthening our fight against pyramiding by tapping the legal expertise of the different DTI agencies to help our DTI regional/provincial arbitration officers evaluate and prosecute, if needed, certain cases."
According to Cristobal, there have been a rising number of inquiries on pyramiding even from embassies abroad, meaning that pyramiding has spread to other countries where there’s a big population of Filipino overseas workers.
Given the hard times, the promise of fast and easy money is the reason why the pyramid scheme is so popular. The rewards of joining and investing in the company, which are dangled in front of you like the proverbial carrot, are hard to resist. The truth is, those at the bottom of the pyramid never get back their investments. When the pyramid reaches its saturation point, it collapses because members are unable to recruit new members. While the company heads earn tons of money from investors (some of the uplines earn a fortune ), the downlines (majority) will just have to kiss their money goodbye.
Likewise, the DTI would like to make consumers aware of the difference between illegal pyramiding and legitimate direct selling/multi-level marketing (like Avon, Amway, etc.) to avoid deception. Read this and be forewarned/forearmed: Legitimate MLM/networking or direct selling involves the sale of products to earn compensation. Uplines earn commission from the sales of their downlines, not from their investment or joining fees. Joining these companies entail hard work, dedication and perseverance. Pyramiding schemes involve recruiting people who will, in turn, make the same investments as the recruiter, and will receive compensation in the same manner as his/her recruiter. Basically, here’s how this illicit operation goes: Applicant invests X amount of money. This money multiplies exponentially by virtue of the number of downlines he gets. He is, in fact, earning from the investment of other people. Under this scheme, investors are supposed to do nothing but invite people to join while waiting for their money to grow.
Be very wary, too, of pyramiding companies who also have products up for sale. Most pyramiding companies claim to be legitimate MLM/networking companies.
Together with the Direct Selling Association of the Philippines, DTI is embarking on a massive information and education campaign for the general public. Also being planned is a joint DTI-DSAP Secretariat to address complaints and inquiries on pyramiding.
The DTI hotline to call is 8977-DTI. Inquiries can also be sent through text via 2920. Or send e-mail to i-reklamo@dti.gov.ph.
We’ve been feeding our one-year-and-eight-month-old son with am (uncooked ground rice) mixed with his milk (Neslac with honey). However, I heard from some mothers that it makes the teeth weak. How true is it?
– MARICHELL
GAPASIN-NAPAT
Kidapawan City
Now, here’s the tooth and nothing but from family doctor Jeepy Perez: "Rice milk and honey can be broken down to simple sugars in the mouth. Sugar in infant milk can be destructive if it is kept in the mouth of the infant who falls asleep with the bottle in his mouth. Babies who are bottle-fed have difficulty in developing proper musculature of the face."
As a diabetic, I find the ad of Fiesta Pancit Ulam alarming.
It shows an obese man heartily digging into his plate of rice and noodles, saying that the noodles are so good, "mapapa-kanin ka sa sarap."
The punchline is: He reaches off-camera for a big bowl full of rice, dumps it on his plate, then justifies it by saying, "Bakit, one rice pa rin naman ah?," then goes on to gobble up the food.
Today, obesity is a fast-rising health concern, and diabetes is on its way to becoming one of the top five killers of Filipinos.
Note the increase in patients seeking liposuction, stomach-stapling surgery, memberships in gyms, all in a bid to lose weight and stay healthy.
Ask any endocrinologist and they will say that they’re seeing younger and younger patients with type 2 diabetes. In its December 9, 2002 issue, Time magazine bannered diabetes as becoming a regional epidemic in Asia.
Against this backdrop, ads like these do nothing to promote good health. If anything, the absence of fruits and vegetables on the man’s plate shows a glaring lack of knowledge about proper nutrition and having a balanced diet.
I wish that copywriters, creative directors, and even clients of this kind of product would take pains to come up with truly responsible advertising, one that would not pose harm to consumers’ health.
– ALARMED CONSUMER
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