Lyconet Customer Cloud = €1500 unregistered securities?
Lyconet are gearing up to release what they’re calling “Customer Cloud” in Europe.
The basic idea is that “organizations” sign up to Lyoness and in turn sign up shoppers (typically members of the organization).
Through Lyconet’s “Cloud Sponsor” program, shopping points generated by the shopping activity of these members are allocated to Lyconet Premium affiliates.
The Customer Cloud in itself isn’t a problem, but qualification for shares in the Cloud Sponsor program do raise unregistered securities concerns.
Sources for the Lyconet customers attached to the Customer Cloud are mostly advertised as originating from sports clubs:
“Without a recommender” refers to customers signs up without a referring Lyconet affiliate.
That affiliate referral is up for grabs, through Lyconet’s Cloud Sponsor program.
Lyconet claim that potentially hundreds of thousands of shopping points will be generated each month, with those points distributed to qualified Customer Cloud Sponsor affiliates:
So how does a Lyconet affiliate qualify as a Customer Cloud Sponsor?
- You must have a European Lyconet affiliate ID
- You must be a Lyconet Premium Marketer
- You must pay Lyconet between €1500 to €4500 EUR
How wide Lyconet expand the Cloud Sponsor program remains to be seen, but for now it’s limited to Austria, hence the European Lyconet affiliate ID requirement.
Qualification as a Lyconet Premium Marketer is as follows:
A Premium Marketer is a Marketer who has reached one of the Career Levels.
Career levels start at 5000 shopping points a month. These shopping points are generated via an affiliate’s downline (at a 50% rate) or via an affiliate’s own purchases and that of their customers (non-affiliates).
The third qualification criteria is where the question of unregistered securities arises.
Each €1500 Cloud Sponsor payment is attached to a “Limited Edition Discount Voucher”, of which Lyconet affiliates are able to purchase three.
The Limited Edition vouchers themselves don’t generate shopping points, but as per our Lyconet review, quoting the Lyoness website (December 2014):
Vouchers are receive digitally and are particularly convenient, as you can order them while on the move, pay for them using your existing Vouchers and redeem them immediately – and of course you will also receive Cashback and Shopping Points.
So to recap, Cloud Sponsor qualification requires the spending of at least €1500 in these “limited edition” vouchers, which can then be used to purchase regular vouchers to make up the minimum 5000 points qualification.
A Lyconet affiliate can of course spend an additional €5000 in regular vouchers to qualify, but I don’t see why when you can just buy new vouchers to qualify using your limited edition ones.
Once qualified, Lyconet then shower qualified affiliates with an advertised potential “xxx-thousand” (hundreds of thousands) in points each month.
So where’s the money you ask?
Well here’s the thing. Once qualified at Career Level 1 (Junior Consultant), Lyconet pay affiliates a monthly ROI based on the monthly generation of shopping points.
Yes, the points Lyconet affiliates are passively supplying affiliates who pay at least €1500 for, in turn pay out 3.7 to 9.3 cents per point each month.
Naturally how many passive shopping points you get each month is based on how many thousands of EUR you dropped on Limited Edition vouchers:
- €1500 paid to Lyconet = 1 share
- €3000 paid to Lyconet = 2 shares
- €4500 paid to Lyconet = 3 shares
And this on top of the accounting units created, which is another passive ROI Lyconet offer (each Limited Edition Voucher generates three units).
Due to the passive nature of commissions paid out, quite obviously each €1500 payment to Lyconet for a Limited Edition Voucher is a security.
You pay Lyconet €x, on the promise they’ll passively supply you with points, such that you’ll eventually earn a ROI greater than €x.
Lyconet as of yet aren’t offering the Customer Cloud Sponsor scheme in the US, and probably for good reason: That being they’re not registered with the SEC.
Trouble is, as far as I know, Lyconet aren’t registered anywhere in the world such that they can legally offer their affiliates investment positions.
Lyconet are currently advertising the Austrian Customer Cloud Sponsor scheme as having a lifespan of six years:
All you need to know today however is that €4500 paid to Lyconet will maximize your share of monthly passive ROI payouts for six years.
the only ‘cloud’ is the one they think they’re pulling over regulator’s eyes.
Hi,
I have been research this Constumer Cloud and you have some facts Wrong .
For exemple, you don’t give/Pay to Lyconet anyting, legaly you are Buying Discount Voucher, that are meant for a costumer going to shop in Lyoness.
Everytime you shop you reedem (In money to your bank Account) that discout voucher.
Sou you are buying to Lyoness discouts in all the shops that are working with the sistem.
And there enters the Network part of Lyconet , if you have free costumers buying in the Sme’s they also redeem your Discout Voucher.
What seems to me is that DIscout Voucher is like the product wich is meant to be “sold” only by recomending SME’s.
So you can be Sponsering and all that but only by buying that Discount Voucher.
by the away sorry for me bad English , keep uo the good work.
You give money to Lyoness, who give you a position that pays a ROI once enough new positions have been purchased by affiliates.
Shopping doesn’t negate the Ponzi nature of the above.
Buying discounts is not a valid MLM product.
It’s not. Again, discounts != products.
Hi Oz, Thanks for the response.
I search and in fact you are buying a product. You are actualy buying a Future product. In fact a smal part of that product.
So which product? – Any product that is beeing sold by all the Sms’s.
And all the MLM / networkMarkting Companys that I have been research fall in some tipe compensation plan and all of them it’s better to have a wide chanel of distribution.
In my opinion, and for what I read from Units its very drastic to call it a Ponzi , or somekind of illegal sctivity
Buying discount != buying product.
You’re buying a position in the comp plan, that pays out a ROI once enough subsequent positions have been purchased.
Oz , thanks for the reaply.
I read some more things. (Compensassion plan and aditional terms & conditions) and the Discount Voucher that you are buying to Lyoness is indeed a service that you are Buying.
That came because a comission that is pay by da SME.
And if you buy that you don’t need any recomendation to have the “re-cash” so you are indeed Buying that.
In my country we use to have a magazine that you have to pay like 5€ or so and that magazine use to have a bunche of vouchers. All the SME’s in that magazine then pay a fee and give the Discount to the client.
So by law you can by what ever you want. If that product or service are good or not is another subject.
Doesn’t matter what you read chief, discounts are not a viable MLM product. You need to actually be buying a product.
When I invest in a shopping unit I pay Lyoness, and Lyoness then pay me a ROI when enough subsquent shopping units have been invested in. It has nothing to do with SMEs.
A magazine is a product. Shopping units and discounts are not.
You pay Lyoness and you get a shopping unit. That unit enitles you to a ROI once enough subsequent units are invested in.
Has nothing to do with shopping or customers.
It’s not. Either it’s a product or it isn’t, and discount vouchers aren’t. The shopping units are what’s being invested in here.
Did you actually read what you wrote?
“You’re buying a future product”. Hahahahaha.
Translation: “You handed over money, which can’t be spent on anything until other people hand over money (or shop, however the addition units are generated)”.
That’s like saying “I paid into a pyramid scheme by making a down payment toward my eventual 500% reward.”
Thanks for the reply OZ.
Why discout Vouchers are not a viable MLM product in your opinion?
” You need to actually be buying a product.”
In fact you are buying a service/Product what ever you whant to call it by “Uniform Commercial Code”
Make complete sense to me.
And for some courts too. Like I had oporttunity to Read.
Thanks for your time Oz.
And K Chang don’t be rude to people that are researching things online and trying to learn sommething in comunnity!
Best regards
buying discount vouchers is perfectly allright, but paying multilevel commissions on the purchase of discount vouchers is illegal.
this is because under US laws, multilevel commissions can be paid only on ‘completed sales’ of products or services to end user consumers.
a discount voucher is an incomplete financial transaction without delivery of the product/service.
mlm-thewholetruth.com/mlm-legal-issues/mlm-coupons-vouchers-gift-certificates-and-down-payments/
So is this a nice investment uppertunity or should one stay away?
Lyoness is actually expanding huge these days.
PS: Im not lyoness partner, but am thinking of going in now in this investment.
So how’d you figure that one out then? Both Lyoness and Lyconet websites are in decline (Alexa).
Anyway, as an investment opportunity Lyoness operates mostly as a Ponzi scheme (few percentage of the ROI is likely attributable to legit shopping cashback).
There’s your answer.
Well, I am so sorry to put it so directly. Lyoness is not a Ponzi scheme according to court rullings.
As far as I understood, you can not invest in Lyoness. Legitimate or not a legitimate bussiness is not a question here. Do your homework.
False, Lyoness has never been taken to court for being a Ponzi scheme, only a pyramid scheme.
The ACCC tried to make their case about Lyoness being a Ponzi scheme at the eleventh hour (while the case was at trial), but the Judge wouldn’t permit it.
You understood wrong.
I invest in Lyoness, Lyoness pays me a ROI once enough subsequent investments have been made.
Legitimate business is always a question when it comes to evaluating MLM opportunities. Only someone trying to recruit you into something shady would suggest otherwise.
Ponzi Scheme is a form of illegal Pyramid scheme. Well as a Lyconet marketer – I got every EUR back on time and according to the compensation plan – because I do shoop at Lyoness partners for 6 years now – think am I really so special – I do not think so – investement???:
I did my homework:
(Ozedit: Uncited copy+paste removed)
If you only shop 6 years is about right to earn back your AU investment.
If you’ve made significant money, you invested and got paid when you recruited others who invested. Don’t play dumb.
We’ve covered the legal decisions so I marked them as spam (uncited copy+paste from Wikipedia anyway).
Well i am not playing dumb. I did not invest. I did not recruit others who invested. Let us agree that we do not agree. Can you explain the last sentence.
It seems to me, that you know everything better than the rest of the world? You do not exept court decisions- that is your problem. (Ozedit: Complaining about stuff that was never said removed)
So you didn’t put any funds directly into AUs?
Damn, as an affiliate then you’re brave. If you keep shopping maybe in another 10 years you’ll have enough for a Mars Bar.
To date Lyoness hasn’t had to explain why it isn’t a Ponzi scheme in court. Not my fault no regulator has taken them to task about it.
The chat about purchasing vouchers for ex. 1500Euros. It leaves me with the question: Are the vouchers useable everywhere… probably not. But somehow I cannot google my way to find out which shops are in on the deal.
Is it top secret until “after you signed up”??
Vouchers should work at Lyconet merchants. You’re converting real money into Lyconet virtual money, that’s all.
So, as I read here, if US law does only permit payment commissions once there is a full transaction, how any product based company can pay commissions before their any person who joins really sell their products?
Probably you will say: There is a real immediate product, so it’s up to the person who bought it sell it. What he received by growing his team is already based on sold products.
What’s the difference on Lyconet? There is first a “virtual product”, the discount voucher, with real products connected. If the people who buy it will get their discounts back with purchases or not is their responsibility too.
As in any NM company, I can build my business regarding continuity by teaching my team to sell the products or just by recruiting new team who stock up the product.
Every discount voucher is redeemed by your purchases and your customers (who pays nothing) in every 70.000 merchants at this time, offline and online. So it’s only up to you make the work in order to get every cent back.
By selling an actual product. Not trying to pass off a discount as a product in and of itself.
Selling discounts is not a product. It’s a vehicle to conduct money games through.
I as an affiliate invest $x. When enough new funds have been invested Lyconet pay me a ROI, paid out of subsequently invested funds. There’s your difference.
The only MLM companies in which this is possible are pyramid schemes.
I’m sorry to disagree with you.
You can compare buy a discount voucher as buying for example a pack of 10 products of a company, that you will sell with, let’s say a 30% margin.
You receive immediately commissions and then when you sell it will receive more.
When you buy a discount voucher, you’re getting in advance the equivalent to a certain volume of purchases, therefore you are paid for that generated volume, once you make the purchases you will receive the amount of your discount voucher back.
By the way, you can build it with no discount vouchers at all, and only through purchases. The only difference is that the commissions are less in long term.
Regarding the last point, let’s talk a specific company like (Ozedit: Let’s not. Offtopic derail attempts removed.)
No you can’t, because you’re not actually buying anything.
In MLM you need to be selling products. A discount isn’t a product.
Yet here we are. The whole AU investment scheme (sorry, shopping units or whatever they’re called now) doesn’t work with real products (Lyoness has no money to pay ROIs with).
That and you can’t reinvest “real products” into new shopping units to further the ROI scheme.
You can compare a Volkwagen to a Porsche and find a number of similarities, as well.
However, a Porsche is not a Volkswagen, just as discount vouchers are not “products” when discussing MLM.
If I understand correctly this is a legal problem that there is in the United States. In europe lyoness works and is expanding, so it seems because only they have real numbers.
If you take it as a network, you get people (preferably premium buying clouds etc) or small businesses you’ll have some real gains (I’ve seen them with friends in there).
The things change with the clouds (they call them in that way im in Italy), if you decide to buy at least one Cloud 1500,00 (after spending 107,00 starter packs and 2400,00 premium members), then after 36 months it starts to pay (after 3 years it will pay for other 3 years) according to the shopping point of the country.
How it will pay? I guess the more you buy the more you will get but how? is like a bond or something?
When? The first cloud (Austria) should pay soon if I understand correctly.
The only problem is if there won’t be other people willing to ‘invest’ 4000,00, they will probably have some problems to refund first and then to pay extra money to those who bought the Clouds.
Not too much. The opportunity mostly stalled there years ago (saturation).
You pay money, recruit others who do the same and then you steal a percentage of the money they paid in.
Well it looks like in Austria Lyoness has lost a court case. Finally their TC terms has been declared illegal in Austria.
It would be cool if we could get an English version transcript of the court case.
lyoness.pissedconsumer.com/the-verdict-by-the-austrian-supreme-court-concerning-the-lyoness-general-t-cs-was-already-reaffirmed-during-the-first-proceedings-201709021095600.html
yes, this with the normal networking way. But what about the clouds? Wich costs 1500 each one and pay only after 36 months.
How are they going to pay? I mean in which term? based on how many shopping points there are in that country they would say but this doesnt explain in concrete.
They always promote these clouds as a way to create a passive income through the years but You are not really ‘INVESTING’ money because you dont know how much will be your ROI.
That sounds like a Ponzi scheme to me even if there are several sentences that claim the opposite.
36 months is a long time to get new recruits. The money they invest is used to pay off existing investors. Same as the rest of the Lyoness comp plan.
Getting a return makes a deposit an investment. Not whether you know how much of a ROI you’ll receive.
They had their first seminar in Italy, doesnt look like it was full of people.
youtube.com/watch?v=AVv-jZ8ZCYk