DTI to issue ‘seal of legitimacy’ to direct selling, multi-level marketing firms

To safeguard customers and promote fair and responsible business practices, the Department of Trade and Industry (DTI) announced on Friday that it will issue a "seal of legitimacy" to direct selling and multi-level marketing organizations.

In a statement, the DTI said it released Department Administrative Order (DAO) 21-09, or the Guidelines on the Grant of the DTI Seal of Legitimacy for Legitimate Direct Selling and Multi-Level Marketing.

Under the order, companies engaged in legitimate direct selling and multi-level marketing may be granted a seal “that will serve as a mark distinguishing them from among those with questionable practices.”  

With the “seal of legitimacy,” the DTI said it hopes to protect the public from becoming victims of companies employing chain distribution plans or pyramiding scams that are prohibited under Article 53 of the Consumer Act of the Philippines or Republic Act 7394.

“Through the DTI Seal of Legitimacy, we hope to guide the public in choosing the direct selling and multi-level marketing companies they will engage with so they will not fall prey to pyramiding schemes masked as MLM (multi-level marketing),” DTI Undersecretary for Consumer Protection Ruth Castelo said.

The agency said interested companies may submit their application to the Consumer Policy and Advocacy Bureau (CPAB), together with the following documentary requirements:

• Certificate of Registration issued by the DTI/Securities and Exchange Commission (SEC)/Cooperative Development Authority (CDA);
• Business permit/license to engage in the business as applied with the local government unit (LGU);
• General Information Sheet or list of officers or members including their Tax Identification Number (TIN);
• Certificate of Bureau of Internal Revenue registration; and
• Compensation and marketing plan

According to the DTI, all applications must be reviewed by an evaluation committee before being approved by the Undersecretary for Consumer Protection Group (CPG).

Companies that have been granted the seal will also be subjected to random and periodic audits to ensure compliance, the agency said. —VBL, GMA News