HOUSE OF REPRESENTATIVES:
RECEIVED

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

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SEVENTEENTH CONGRESS REeISTPATION UN |
First Regular Session BILLS AND INDEX SaViCK! |

HOUSE BILL NO. 1468

Introduced by Representative Harlin Neil J. Abayon II!

EXPLANATORY NOTE

This bill seeks to curb the growing threat of pyramid schemes as a way of
defrauding individuals and groups of their hard earned money. This measure was
previously filed by Senator Manny Villar in the 15" Congress. Passage of this bill is

earnestly sought now in the 17" Congress.

HARLIN NEIL J. ABAYON III
Representative
Party-List AANGAT TAYO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.1468

Introduced by Representative Harlin Neil J. Abayon III

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT 7394,
OTHERWISE KNOWN AS THE CONSUMER ACT OF THE PHILIPPINES,
DEFINING FOR THE PURPOSE THE CRIME OF PSEUDO-INVESTMENTS,
PROVIDING PENALTIES THEREFORE AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of the Representatives of the Philippines
in Congress assembled

SECTION 1, The following provisions of the Consumer Act are hereby
amended to read as follows:

Title Article 4(k) Pseudo-Investment refer to but are not limited to:

() “PYRAMID SALES SCHEME OR “CHAIN
DISTRIBUTION PLAN”, REFERS TO SALES
DEVICES WHEREBY A _ PERSON. UPON
CONDITON THAT HE MAKES AN INVESTMI
BY WAY OF PURCHASING GOODS OR PAYING A
FEE, IS PANTED BY THE MANUFACTURER OR MS
REPRESENTATIVE A RIGHT TO SELL PRODUCTS

AND SERVICES AS WELL AS RECRUIT ONE OR

MORE ADDITIONAL PERSONS WHO WILL AFRO

BE GRANTED SUCH RIGHT TO RECRUIT UPON

CONDITION OF MAKING SIMILAR

INVESTMENTS;

(2)“PONZI SCHEMES” REFERS TO A BUSINESS
STRUCTURE SIMILAR TO THE PYRAMID
SCHEME OPERATED BY A PERSON OR GROUP,
NATURAL OR JURIDICAL WHERE THERE IS NO
‘TRUE PRODUCT OR SERVICE BEING OFFEED IN
EXCHANGE FOR THE INVESTMENT AND WHERE
THE MONEY TENDERED BY NEW INVESTORS
ARE PAID TO EARLIER INVESTORS;


(3) “TELEMARKETING FRAUD” REFERS TO A
SCHEME WHERE HIGH PRESSURE TACTICS ARE
MADE OVER THE PHONE WITH THE INTENT TO.
MAKE THE INVESTORS BUY INTO A
FRAUDULENT OR NON-EXISTENT INVESTMENT
OFFERING;

(4) “TECHNOLOGY FRAUD” REFERS TO A SCHEME
WHERE! INVESTORS ARE LULLED INTO
MAKING PURCHASES OR INVESTMENTS OF
NON-EXISTENT PRODUCTS THROUGH THE
INTERNET HOME OR CYBER SHOPPING.

Title UI Chapter 1 Article 53. PSEUDO-INVESTMENT. SCHEMES.

SECTION 2

PSEUDO-INVESTMENT SCHEMES AS DEFINED IN
TITLE I ARTICLE 4(K) OF THIS ACT SHALL NOT BE
EMPLOYED IN THE SALE OF CONSUMER PRODUCTS
AND SERVICES,

Article 60. Penalties. Any person who shall violate the
Provisions of Title II Chapter 1, shall upon conviction, be
subject to a fine not less than ONE HUNDRED THOUSAND
PESOS (P100, 000.00) [Five Hundred Pesos (P500.00)] but not
more than FIVE HUNDRED THOUSAND PESOS (P50,
000.00) [Ten Thousand Pesos (P10, 000.00)] And [or)
Imprisonment of not less than TWO (2) YEARS [five (5)
months] but not more than FOUR (4) YEARS [one (1) year] [
or both] upon the discretion of the court.

Repealing Clause. ~ All laws, decrees, executive orders,

issuances, rules and regulations or parts thereof contrary to, or inconsistent with this
act are hereby modified or repealed accordingly

SECTION 3. Effectivity. - This Act shall take effect fifteen (15) days after
following the completion of its publication in the Official Gazette or in two (2)
national newspapers of general circulation,

Approved,