DTI-DavSur intensifies drive vs. investment scam

DAVAO CITY (MindaNews / 23 Feb) – The Department of Trade and Industry (DTI)-Davao del Sur has already intensified its consumer education campaign that it is set to form a Task Force next month to run after companies selling unregistered investment products after reports that pyramiding and investment scams have infiltrated the province.

During Monday’s orientation on Pyramiding and Investment Scam at the Apo View Hotel Davao, DTI-Davao del Sur provincial director Delia Ayano said that they are bringing their efforts a notch higher to deter the pyramiding and investment scams, also known as Ponzi investment, that might victimize uninformed investors in the province.

The component agency of the task force will include DTI, Criminal Investigation and Detection Group (CIDG), local government unit, and Security and Exchange Commission (SEC).

She said that they will include in their consumer education seminar topics such as ways how the people can spot an investment scam so that they will know how to protect themselves.

These are on top of the current topics that tackle only basic consumer rights and consumer responsibilities, Ayano said.

“We don’t like that the consumers will be victimized by this kind of scheme. We have to be very vigilant,” she said.

According to SEC, among the features of the Ponzi investment scheme include no SEC registration, offers or guarantees a huge profit in period, utilizes a binary network to earn commissions, no paper trail, promises, little or no financial risk, and provisions for a lock-up period where an investor cannot touch the investment.

“It also assures pay-off of investments in a short time, uses high pressure methods to convince investors to reinvest their earnings, unknown principal share office, address, founders, directors or officers, and orientation seminars are conducted informally,” it added.

DTI-DavSur was alarmed after reports that Ponzi scam has reached some areas of the province, which is composed of the municipalities of Bansalanan, Hagonoy, Kiblawan, Magsaysay, Malalag, Matanao, Padada, Santa Cruz, and Sulop, and Digos City.

“In general, we have to safeguard the welfare of the consumers because pyramiding and investment scams are so rampant. We would like them to know how to detect a pyramiding or investment scam,” she said.

The Jacama Sales and Marketing, whose business name registration was with DTI, was reportedly offering a cash back guarantee sales program to investors as the main product, although its permit with the city only granted them to operate as a retailer of general merchandise.

SEC-Davao extension office head Javey Paul D. Francisco said that the company had drawn 15,000 to 20,000 investors before it was stopped by the City Government last month.

5 monitored now with SEC Manila

Francisco said they have forwarded to SEC-Manila for recommendation the five companies that were monitored in Davao City.

All five companies had their business registrations with DTI-Davao as single proprietorship ventures but were allegedly selling unregistered investment products.

Francisco added that before a company can offer investment contracts to any individuals, it must be registered with SEC, with a minimum paid-up capital of P50 million.

He said it is easy for a company to have a business registration with DTI even though the products offered are different from what they intend to sell.

DTI-Davao City director Edwin Banquerigo said that the agency cannot deny the businesses who register with them for as long the requirements are complied.

“They satisfy the requirements. You apply, show your ID and the accomplished form of the business you are registering. There is no reason to deny but the point is, they engage to other businesses,” he said.

Engaging in businesses other than what has been applied can be ground for the revocation of business registration because “you have to engage business as declared,” he said.

Francisco suggested that SEC be given the prosecutorial powers so that it will be easier to file a case in court.

He discussed that complaints are currently filed before the Department of Justice (DOJ), being the prosecutorial arm of the government, before filing a case in court.

“In the case of Securities laws, these are special laws and SEC has more direct experience and knowledge. It will be easier to prosecute,” he said.