June 16, 2019 - Sunday
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Davao City, Philippines

Scam, scammers, and scammed (Conclusion)

June 07, 2019 - Friday 4:06 AM by Eva Aranas Angel

(Continued from May 30).

After losing P800 in 1986 in a pyramiding scheme in college, I vowed never to engage in any get rich quick money making scheme. This includes multi-level marketing which involves recruiting ‘down-lines,’ earn passive income, and amass tiers that qualify for overseas trips. Usually, these companies require a humongous registration fee in exchange for discounts on ‘branded’ products (which, trust me, many of us do not need), and a freebie. This scheme, like Quadrant which had its heyday in the early 2000s, promised returns on top of the discounted, useless, overly priced products. Backed by the powers-that-be close to Gloria Macapagal-Arroyo, including Mike Defensor to lend it legitimacy and right to name drop, the owner became one of the richest women in Asia. When it couldn’t sustain its operations, First Quadrant just changed product and business model.

When I came back to Davao in 1998, while preparing for my wedding, I had more people recruiting me for MLM than I had patients in my waiting room. I have since repeatedly refused because my principle was that I shouldn’t be prescribing any supplements that were not in the Philippine National Drug Registry. Besides, this entailed recruiting down-lines and I wasn’t and still am not cut out for selling because I do not sugar coat, I couldn’t lie and I do not wish to appear like a fawning sycophant just to sell. Besides, it is the era of Evidence Based Medicine and Clinical Practice Guidelines.

I am not, I repeat, I am not disparaging multi-level marketing. In a South Dakota site of the Office of the General, and I quote, the two, MLM and Pyramid Schemes, were defined ‘ Multi-level Marketing (MLM) or network marketing, is individuals selling products to the public -- often by word of mouth and direct sales. The main idea behind the MLM strategy is to promote maximum number of distributors for the product and exponentially increase the sales force. The promoters get commission on the sale of the product as well as compensation for sales their recruits make, thus the compensation plan in multi-level marketing is structured such that commission is paid to individuals at multiple levels when a single sale is made and commission depends on the total volume of sales generated.

Pyramid Schemes are, however, fraudulent schemes disguised as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.’

However, the state of California warns that not all Multi-Level Marketing is legal. The site warns of the red flags. Multi-level marketing programs where participants sell products to the public and earn commissions both from their own sales and from the sales of the people they recruit can be a legitimate business using a network of independent distributors to sell consumer products. However, not all multi-level marketing programs are legitimate. Some are illegal pyramid schemes in disguise. Be careful and ask questions before signing up.

And remember:

Just because your family and friends are participating, don’t assume an opportunity is legitimate. They may not know the business is an illegal pyramid scheme.

A celebrity endorsement or member does not make the business legitimate.

If it sounds too good to be true, it probably is!

If you are considering buying into a multi-level marketing plan, ask a lot of questions and get details about the company and the products. Be careful about fraudulent marketing practices and potentially useless or unsafe products. Remember that your sponsor and others above your sponsor’s level will make money if you join—so take your time to make a smart, well-informed decision.

In 2011, I had a new driver because my driver of nine years left for Manila, having married to someone from Bulacan. He was replaced by an ex-taxi driver who was an accountancy graduate but never managed to have a desk job because of a deformity sustained from an injury. Manong P. did not stay long with us despite above-industry daily rate. Here’s the reason.

About a year into his stay with us, he’d been sporadically late and refused to do overtime. We learned what he was up to. He was apparently attending meetings, after having been recruited by a person he named Sir Ding. He said he was asked to pay a joining fee of P500 which will become P50,000, the time of which he would get his money would depend upon the number of people he would recruit. My former secretary would then tell me that he was recruiting other secretaries, security guards, and even my patients in the workplace and dropped my name and my husband’s as having invested P5,000 each, which meant we were to get P500,000 in return if each of us recruited 16 members. One day my then secretary Asad complained that he would no longer accompany Manong P. in errands because he was embarrassing him, he was embarrassing us. While having snacks at a burger joint, he would entice the food crew with this line ‘Miss, gusto nimo himuon nako ug P50,000 ang imong P500?’ which would spark endless conversations as he would explain the scheme to the unsuspecting person. This would also delay them especially when trying to catch the banks before they close. Manong P. would also show people a wad of money which he would turn into a fan and say ‘This is how much you would get if you joined our co-op’. It was money I asked him to deposit either to my Current or Savings account.

As he drove for me, he would entice me to invest and when I repeatedly refused, he would say something like ‘The problem with you people is that you don’t want to get rich’ And I would say, no thank you but I want to earn honest living. Sometimes, when we were stuck in traffic, he would say ‘I already asked my son from Saudi to invest P10,000. That will become P1M. I can buy my daughter a fast food franchise!’ I humored him and asked, ‘Mall-based or Stand Alone?’ He was frazzled by the question and asked me ‘Unsa na sya Ma’am’? I replied as patiently as I could and explained mall-based is a cheaper franchise at P15-20 million (remember this was in 2012) and stand alone could be in the vicinity of P40 million. He was unfazed by my reply. He said ‘Kamahal ba diay. Padugangan nako ang remittance sa akong anak gikan sa Saudi!’ I meant to discourage him. I failed. I wanted to bop myself in the head.

A few weeks passed and my husband, who invested P5,000 just to ‘shut him up’ for lack of a better word, because he was every day increasingly becoming pesky. When husband demanded his share, Manong P. brought a personal check (Red Flag: not a commercial account) in the amount of P4,000. Husband and I both laughed because that was not the promised return and reinforced our doubts about the legitimacy of the Baus Co-op. Manong P. reasoned that there were paper work that needed to be done, rentals and other office supplies purchases like computers, which, as an Accountancy graduate, he proposed to encode all members and their contributions and expected returns and when.

While having breakfast with us in November of 2012, Manong P spewed out his resignation from being our driver. He said ‘Sir, positive. Mag-resign na ko sa December. Naa na gitagana na P2M si Sir Ding. Magtunga daw mi ato unya, ako na ang himuon niya nga cashier.’

Despite our doubts with the company, Ted and I are employers who would not curtail one’s chance at self-fulfilment and social mobility. We were ambivalent with his leaving for two reasons. First, he was already embarrassing us by dropping our name to every Pedro, Maria, at Tricia that he would meet and tried to recruit. Second, even if we’re two decades younger than he was, we knew where this would lead to.

On December 24 of the same year, he came knocking on our doors, wanting to come back. We did not have to ask why to spare him the humiliation. But when he said he was visiting ‘para mangayo ug Pinaskuhan, I couldn’t resist. I asked where his share of the P2M went. With eyes darting sideways and head bent, he confessed that they all woke up one morning and when they reported for work, found the office in Palma Gil Street empty.

To me, it was déjà vu.

Ted, my husband, has always been warning me as I read from the advisory of Atty. Cesar ‘Jikjik’ Europa that’s been going viral. If something is too good to be true, it is too good to be true.

With all the information, alerts, warning and imprimatur given (the Christian Fellowship we’re attending Sunday service gave this warning too prior to the service) I don’t want to be in one corner saying ‘I told you so.’

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