Image via WikipediaIn the Philippines, pyramid scams are outlawed under Department of Trade and Industry Administrative Order No. 8. Here's an excerpt (copied from DSAP)TVI Express FAQ are very clear
2.1 "Chain Distribution Plans or Pyramid Sales Scheme" means sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer or his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments: Provided, That, the profits of the person employing such a plan are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit: Provided further, That limitation on the number of participants does not change the nature of the plan.
2.2 Other Forms of Chain Distribution Plan/Pyramid Sales Scheme. - Without limiting the coverage of the term "chain distribution plan or pyramid sales scheme" above, business, sales or marketing plan or scheme is considered as Chain Distribution Plan or Pyramid Sales Scheme if:
a) A promoter persuades recruits to purchase products, services, credit, title or rank whereby the recruits can receive income primarily from the mere introduction, recruitment or sponsorship of other participants into the scheme rather than from the marketing and sale of products; or
b) Where the profits of the person employing such are derived primarily from the recruitment of the other persons into the plan or scheme rather than from the sale of consumer products, services and credit and said plan/scheme includes, but not limited to, one or more of the following attributes:
b.1. revenues or income are derived from participants' entry fees;
b.2. in order to earn income, participants must sponsor a fixed number of other participants, each of whom must in turn sponsor a fixed number of participants as in a plan compensating participants balancing number of recruits than number of sales volumes;
b.3. a participant's income is dependent primarily upon the participant's slot or position within the organization as determined by the time, date and order of participation;
b.4. participants are not allowed to return marketable and unused products for refund within a reasonable period of time or the conditions for such product return are contrary to the provisions of the Consumer Act and/or its Implementing Rules and Regulation (DAO No. 2, s. of 1993).
b.5. there is no fair market value for the goods received (Fair market value is a price determined an open market system. An indicator would be that consumers would still be willing to buy a product at its quoted price even without participating in the compensation plan).
FAQ 3: You do not have to sell any products.
This is (b1), as there is no other source of income.
FAQ 5: You need to sponsor two people, and teach each of them to sponsor two more people.
This is (b2) criteria, as there is requirement to recruit / sponsor.
FAQ 10: When you cycle out (by completing the pyramid/board) you get $$$.
This is also part of (b1), as you are paid by filling up the pyramid.
No comments:
Post a Comment