But first, just a brief background on UPWARM:
What is UPWARM all about?
UPWARM is another online MLM. Their website can be found here: http://upwarm.biz/
As per their FAQ section, they are a networking business.
What is their product?
Nothing! Their product section is nonexistent. No information at all as to what they sell. But they did say that you get some choco drink after your sign up (more on that below).
How much does it cost you to join?
Their membership fee is P1,499.00.
How do you earn?
Recruit at least two members so basically you earn by recruiting others into their business.
Why is UPWARM a scam?
UPWARM is even worse than SWA.
It is a scam because of the following reasons:
1. It has no products. You earn by recruiting. Earning by recruiting is a prohibited business practice under the Consumer Act of the Philippines.
2. UPWARM’s focus is on recruitment. It does not market any product at all.
Since you earn only by recruitment, its business is qualified as a pyramiding scam under Article 53 of the Consumer Act. The law prohibits a business practice whereby the members or the corporation earns solely on recruitment. And let me quote again the Department of Trade and Industry on what pyramiding is all about:
…the test to determine whether or not there is a violation [of the Consumer Act] is whether the scheme involves an investment (entry fee and purchase of goods, or purchase of goods alone) for the opportunity to receive earnings primarily from recruiting, rather that from sales. If so, then there is a violation of law.
Other red flags:
1. It is a limited liability corporation/partnership. There is nothing wrong with that per se. However, being a limited liability partnership, once something goes wrong (as what’s going on now – see UPWARM complains here), it will be tough to go after the partner-incorporators.
By the way, the founder of UPWARM is Rodolfo Miranda, Jr. But nevertheless, since UPWARM is being used as a conduit to facilitate a crime, i.e., pyramiding, the partner-incorporators like Miranda will meet the full force of the law once prosecuted, they will be personally liable for all the crimes and liabilities facilitated and incurred via UPWARM.
2. UPWARM claims that it has its own brand of a choco drink which is called UpWarm Rise Choco Drink. They however did not provide the details of such product. There’s not even a dedicated product for it. Look, if you believe in your product, you should at least dedicate one webpage for it. How can the people be informed of the quality of your product? This just shows that UPWARM is geared on recruiting rather than selling – and again, that’s against the law.
3. On their website, they did not post their articles of partnership and by-laws. Hence, there’s no information at all as to what were they authorized to engage in. What type of business are they supposed to conduct.
4. Their website was not professionally built. There’s a lot of wrong grammar, no capitalization of letters, etc. Their website is even incomplete and they already launched it. Not a good sign of professionalism. I have a bad experience of scammers modifying their website once they get confronted so before they make a change, I made a screenshot of their website here.
5. No face to face transactions. Just watch this DTI/DSAP advisory why this is prohibited:
6. The corporate/company bank account is actually a personal account (under Miranda’s name). This is a no-no. Funds of the corporation should be placed in a separate account and should not be mixed with the partner-incorporator’s personal account/s. Why? For auditing purposes and taxation purposes. Banks will actually close down personal accounts which are being utilized as corporate accounts (this happened to SWA). This will also invite the attention of the Anti-Money Laundering Council because banks are duty-bound to report dubious or suspicious bank account activities. (This red flag is pointed out by commenter Mr. Rey Macrohon)
UPWARM is based in Tarlac City. Their address is as follows:
Brgy Sto. Cristo
Corner MH del Pilar
So if you want to file a civil case against UPWARM, i.e., collection of sum of money (in case you want a refund and they don’t want to refund), you still have to go to Tarlac (or other branch offices, if they exist). But your best bet is to file a criminal case so that you can file it in your locality especially so that the transaction was done online. For you to be guided on what to do if you want to sue UPWARM either in court or via DTI or SEC, read this article: http://howard.uberdigests.info/2014/06/04/steps-in-filing-complaints-against-scams-in-the-philippines/
Again please remember, if the company is so focused on recruitment instead of legitimate products, it is a pyramiding scam. Please do not get swayed by their promises of “easy money” or “high returns of investment”. You may earn at first but once the pyramid gets so big, it can no longer sustain its base and you will end up not earning. Worse, your recruits can directly ask you for their investment and by then how can you pay?
Update (June 23, 2014)
Click this link to see the list of Upwarm Victims
Update (July 31, 2014)
Upwarm is now officially declared as a scam! Watch the video below.
REMEMBER: The guidelines I used in declaring UPWARM is a scam is the very same guidelines I used in analyzing SWA and NBO. So it’s just a matter of time before these two other scams will be officially declared as such. Kudos to everyone who helped in bringing down Upwarm!