SWA or Supreme Wealth Alliance is one of the most popular online networking we have these days. My Facebook page is teeming with posts about SWA, I’m sure so is yours.
What is SWA?
SWA is the typical networking group. You pay $55.00 or about P2,310.00 in order to join. They have two “perfect” pay plan systems which you could choose from. One pay plan pays you $70.00 for every six people you refer (directly or indirectly) and the other pay plan pays you $20.00 for every 1
st, 5
th, 6
th, and 8
th (onwards) person you recruit. You can view their pay plans in their website.
On SWA’s website, it would seem that these two pay plan systems are the only means for you to earn with them. Obscured is another way of “earning” – that is, selling their ebooks.
SWA, according to their website, has a library of ebooks and other digital resources which would coach you how to be financially successful. Upon signing up, you will have access to these ebooks. You can sell these ebooks too and you can earn commissions by doing that.
But is it a legitimate business?
I wrote an article earlier about how to determine whether a networking scheme is illegal or not. You can read it
here. In that article, I pointed out some salient indicators that could tell us whether or not a networking group is a scam. We’ll use those indicators to determine if SWA is a scam.
First indicator, business focus. What is the main focus of SWA? Is it recruitment or the selling of their products.
SWA’s focus is recruitment. You can tell that from their website as well as the Facebook statuses of the SWA members. Their main selling point is recruitment not their ebooks. Why not their ebooks? Because they know very well that their ebooks are not very marketable. It is recruitment that is marketable to them.
Some may argue that ebooks are one of the best selling digital products today. That is true. But not all ebooks are marketable. The ebooks which are really in demand are fiction ebooks like those of John Grisham and other fiction writers and not business ebooks like those being endorsed by SWA. In the various listings of bestselling ebooks (
here,
here, and
here), you can see that all the bestsellers are fiction ebooks. There are no business ebooks so how do you expect to sell those business ebooks by SWA? So really, their main focus is recruitment.
Besides, SWA is not a publisher, is SWA hiring authors to write ebooks for them? Nor is SWA tied up with a known publisher or any publisher for that matter. So how can we even be sure that SWA has the rights to those ebooks. Further, there are millions of
free online resources tackling the same business techniques and approaches which their ebooks and their other digital resources offer. So again, how can you sell SWA’s ebooks if the Internet is teeming with similar resources which are free.
So what is wrong if their focus is recruitment?
That makes their business illegal. The DTI (Department of Trade and Industry), as well as the Anti-Pyramiding Task Force, states that
…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.
Clearly the, SWA’s business model is a scam: you invest P2,300.00 to join, then you earn by receiving commissions from the entry fees of those you subsequently recruit – again, you can’t earn from those ebooks! Your primary income after joining SWA, and as even advertised by their FB posts, comes from recruitment.
Another indicator is to determine whether or not the business is registered here in the Philippines. If it is registered here in the Philippines then that means it can do business here.
In SWA’s website, it says that it is a registered corporation in Belize since 2012. But it is not registered in the Philippines as a corporation (not SEC registered, you can confirm that at
SEC’s website). So how can it even conduct business here legally? It does not have any business office here as well so if things go awry in the business of SWA, how can the claimants sue SWA? Go to Belize, perhaps? Further, in SWA’s website, how come the full copies of its articles of incorporation as well as its by laws are not posted? How will we know what specific type of business is SWA allowed to engage in? How will we know who are its accountable officers? Are they Filipinos too? Very dubious indeed that these items are missing from the site.
And I find it sad that bloggers like
this guy believes that all he need as proof of SWA’s legitimacy is a scanned copy of the cover page of SWA’s alleged Articles of Incorporation. Tsk tsk…
Curiously, it appears that the founder of SWA is a Filipino. His name is Francis (Franco, in some websites I saw) Chaves. Chaves does have a registered business here in the Philippines called Chavesnet Enterprises. Chavesnet is registered with the DTI so it must be a sole proprietorship only (not a corporation – which means it does not have sufficient capitalization or bond which claimants can go after if in case its business goes bad; corporations are required to set up a bond to secure their creditors, for SWA which claims to be multinational, if it is registered as a corporation here, it should have at least P2.5 million capitalization to be posted as bond and that’s the fund from which SWA’s creditors can claim their money if in case SWA’s business will go bad). But that’s irrelevant anyway because it seems that Chavesnet has already expired as a business because
this page claims that SWA is formerly known as Chavesnet.
From that, it appears that Chaves abandoned Chavesnet, then he went to Belize and started a corporation there called SWA. Then he came back here in order to recruit Filipinos into his business. So why do that? I don’t really know. Why set up your company in Belize? Why Belize? Why not here, since you’re going to operate business here? But surely, this is a technique commonly used by people who want to avoid lawsuits in the place where they are conducting business. They know their business is a scam and so they anticipate lawsuits here. Hence, they may find it prudent to register their company elsewhere for impunity sake.
At any rate, we do have a legal principle called “piercing the corporate veil” which provides that if you can’t sue the corporation, you can sue the people managing the corporation. So people, if you feel aggrieved by SWA you can sue Francis Chaves. If you can find him.
Now also, there’s this
image here which says that Chavesnet is good as a business until 2017. But then again, think of this. Chavesnet is merely registered as a business or a trade name in the DTI. Now SWA people keeps on claiming that Chavesnet manages SWA. How in the world can a small-medium business (as it is registered) manage an international corporation like SWA? Again, businesses registered in the DTI are not posting bonds. They only pay something like P300.00 to P5,000.00 for business permit. No bonds, so creditors can’t go after Chavesnet, they’ll have to sue Chaves himself. In all, this makes the whole set up of SWA dubious.
Another indicator we can use to determine if a networking is a scam is their business model. We discussed SWA’s business model earlier and how it is focused more on recruitment. This business model is a no-no because you can only recruit too many. What happens if there’s no one to recruit anymore? How can you have a return of your investment? You’re lucky if you’re one of the first to be recruited and the first to recruit. You may have at least gained back what you invested. But what happens if those you recruit can’t recruit anymore? Will you refund their money? Is there even a refund policy in SWA?
And speaking of refund, there should be a refund policy in SWA, if we are to believe that recruitment is not their main focus.
This brings us to one argument from SWA members – that their business is not a scam because they are earning. Actually, you can do a google search about SWA and a lot of blog sites will vouch for SWA’s legitimacy – but only because the bloggers claim that they are earning from SWA. Well, you can earn from selling drugs too but it is illegal. The fact that you are earning money from your business does not make your business legit. There are laws to be followed i.e. The Consumer Act of the Philippines (read my
article here to know how this law relates to pyramiding scams).
The earnings in SWA is primarily dependent on recruitment (again, illegal - I hope I have stressed that enough). So you earn only if you recruit. There’s no fallback for the recruits because the business capital of SWA are digital products which are virtually unsellable. So if things go bad in SWA’s business, will you be okay to be paid by ebooks? Absolutely not! You want cash but they have no cash capital because what they have are ebooks, remember no capitalization because it is not SEC registered. Legally you can still sue the corporate founder but I’ll tell you it will be a long and tedious process. Corporate litigations here in the Philippines are no joke. Remember Aman Futures? And even if you win in the litigation after several years, good luck imposing the judgment, by then SWA’s fund, if any, may have dwindled down.
SWA and all the online business it represents is quite enticing especially for the newbies in the Internet. Besides, who can refuse the promise of easy money. Like what most SWA members post “
nagfi-facebook ka lang, kumikita ka na”. I mean, that’s enticing, right? But one must look through a lot of implications – legal, moral, and logical, before parting with your money. It’s true you may earn because you’re good at recruiting but that does not hide the fact that you’re breaking the law.
And for those still considering joining SWA, here’s my advice: be ready to face the consequences. Be ready to recruit and I hope you have a way with words because frankly speaking, you can’t sell those ebooks that SWA is bragging about.
SWA may go scot-free, legal-wise, but it’s a business which has an expiration date. Again, you can only recruit too many. It will die a natural death, if unprosecuted, because it will have to reach a plateau – a time when no one can be recruited anymore. And by that time, when the base of the pyramid is so big, who will answer for the unpaid investments of the new recruits? The recruiters? Just think of Aman Futures, if you happen to have been recruiting by that time, do you think you can pay off the investments of your new recruits? So yeah, this is something for you to think about before joining SWA or before recruiting someone to join SWA and all other similar online businesses.
And one more thing, if SWA is earning so much -as well as SWA members, why am I not seeing them organize a relief operation for Yolanda victims – just an additional thought – not really an indicator. But you get what I mean.
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