Filipino group welcomes probe into pyramid scam

Powerhomes Unlimited Corp, a Manila-based networking company with hundreds of members among overseas Filipino workers in the UAE and other Gulf countries, has welcomed probes into pyramid scams that have hit the Phillippines.

Benjie Lagman, a member of the company's 15-member leaders' council, told Gulf News Powerhomes members didn't have to worry about the bad publicity and Senate investigations into the fly-by-night "multi-level marketing" companies.

"This is certainly a welcome development for us. Now, we will be able to explain our side and clear our name from the malicious and insidious intrigues hatched by certain quarters," said Lagman.

A Powerhomes member in Dubai said the Court of Appeals in Manila has already lifted the cease-and-desist order against Power-homes issued by the Securities and Exchange Commission (SEC). The company, in turn, filed a countersuit against the SEC to repair the damage.

The member also said the probe launched by the Trade Depart-ment allowed the company to clear its name and let the axe fall on the real scamsters, which have victimised even police officials.

As a "leverage marketing" company, each Powerhomes member invests around $320 (including value-added tax) to avail of a set of training packages.

A member earns $73 as a marketing fee for selling the same package to two people. The training includes three computer courses as well as a marketing training package on real estate sales and leverage marketing courses. OFW members obtain an e-learning package via the Internet.

Each member also gets 2.5 percent commission for every property he sells to his "downline", in addition to the $3,000 bonus after his network reaches 250 pairs. Members are entitled to discounts when buying property from 24 developers in the Philippines.

"The apprehensions people have about Powerhomes is borne more by ignorance than by facts," said the member. "But we can't blame them because of the existence of many fly-by-nights who refer to themselves as leverage marketing companies."

Lagman said Powerhomes can't be considered a pyramid company, even if it employs the socialised power pairing system. "When you're selling a product or service, you can't be called a pyramid company," he said.

But it is true that Powerhomes allows members to earn quick bucks. Within just three months, one energetic member who gathered several other members in Dubai claimed he has already received $1,400 in referral fees.

Critics of the company say leverage marketing is just a facade of a pyramid selling scheme that will one day reach saturation point.

But Lagman explained the saturation point is a conceptual fallacy because in fact, members can 're-invest', thereby creating a 'cyclical', not linear, progress. Even multinational companies, he explained, employ a pyramid-like network marketing, branching out from the top.

Lagman said Powerhomes is getting bad publicity from rival leverage marketing companies and the people who do not understand its operations and benefits.

Since foreigners are allowed to own office or residential units in high-rise buildings in the Philippines, this is also being explored by PowerHomes to its advantage by signing up other expatriates.

"We're not just about networking. We're building networks to realise the dream of every Filipino to own a decent house," Lagman said. "That is also true for our members who belong to other nationalities, although they are limited to ownership of high-rise flats."

PowerHomes today has gathered more than 1,000 members, mostly among the Filipino community in the UAE and Oman, with lots more in Saudi Arabia, Qatar and Kuwait.