Lyoness a pyramid scheme in Italy, fined 3.2 million euro
Following a boom in local investor recruitment, Lyoness caught the attention of Italian authorities.
Italy’s Competition Authority (AGCM) announced a preliminary investigation into Lyoness in September 2018.
The investigation concluded in late December, resulting in Lyoness being declared a pyramid scheme.
As per AGCM’s investigation,
the promotion system used by the company Lyoness Italia Srl to spread among consumers a formula for the purchase of goods with cashback (ie with the return of a percentage of the money spent at affiliated merchants), is incorrect because it integrates a system with pyramid characteristics.
For those unfamiliar with Lyoness’ business model, the company uses a cashback ruse to mask pyramid recruitment. Those recruited invest in units, which pay a fixed ROI once enough new investments have been made.
Or as the AGCM put it;
(Lyoness’) promotion system, using the pretext of described advantage of purchases with cashback, actually involves the recruitment of a large number of consumers who are required, after having assumed the role of sales manager, to pay an entry fee particularly high to access the first commission level (equal to € 2,400.00) and start the “career” as Lyconet Premium Marketer.
Subsequently, they must recruit other consumers, as well as make additional payments to confirm and progress in the “career”.
Of particular note is that the AGCM investigation revealed cashback shopping within Lyoness only accounted for about 16% of Lyoness’ revenue in Italy.
The remaining 84% was sourced from direct investment in shopping units.
This is due to the fact that, by design, the amount of volume required to trigger a ROI is unfeasible through cashback.
The achievement of high levels of Shopping Points- the compensation scheme remuneration mechanism – is essentially possible only with the payment of sums of money by the participating consumers or by the subjects recruited by the latter.
According to information provided to the AGCM by Lyoness,
many tens of thousands of consumers have paid the aforementioned sums of money to enter, participate and remain in the system, (but) only a very few individuals have actually managed to achieve significant positions.
AGCM also took issue with how Lyoness presented its business model, labeling its marketing practices “deceptive”.
In addition to be declared an illegal pyramid scheme, AGCM has also fined Lyoness €3.2 million EUR.
BehindMLM began warning consumers of Lyoness’ Premium member Ponzi scheme back in 2012.
Unfortunately Lyoness manages to continue migrating to different countries once caught or local investor recruitment collapses.
Lyoness has also tried to mask the scheme by renaming “accounting units” to “shopping units”, and changing the company’s name to Lyconet and more recently, Cashback World.
At the time of publication Alexa estimates that Italy makes up a whopping 47% of traffic to Lyoness’ website. Italy is also the top source of traffic to the Lyconet website (35%).
Which country Lyoness will migrate to having lost its largest investor market remains to be seen.
Update 1st February 2021 – Following renewed promotion of Lyoness in Italy throughout 2020, the AGCM has once again confirmed Lyoness is an illegal pyramid scheme.
Operating locally as myWorld Italia Srl and Lyconet Italia Srl, the AGCM has fined Lyoness another €3 million euros.
Buh-buh-buh-buh-but……
…cashback?
Now it is time for other countries to step up to the plate and do the same and get this Ponzi shut down.
The US FTC has been provided more than enough information to have taken action against them 2 years ago and ongoing information, and for some strange reason have ignored all the information.
Conversely the US market is dead and all have lost their money, unless they want to sue Lyoness.
Lyoness can stall them and make them run out of money before it ever gets to court. Their only hope is to get a class action lawsuit approved and filed.
It might wake the FTC up and get them to finally take action. So frustrating they ignored taking action against them.
Several layers to Lyoness. The shopping and cashback part can’t possibly be a pyramid scheme as payments are direct to the shopper and it costs them nothing for a card; free money, a percentage of the purchase in cashback, paid by the store.
It’s that other part where people can purchase spots in the system that can be considered a pyramid according to my understanding. So I wonder if the people in the US who are simply shopping will continue and just get their cashback.
That whole deal has good stuff and some murky stuff.
Lyoness is dead in the US and has been for some time.
The reason there’s still traffic from the US is legacy affiliate investors who position themselves at the top of new countries Lyoness migrates to.
What is the problem if you get money back? NOTHING! All people in 47 countries where CBW can be used are getting it back. The only decision is are you going to collect your own money or you will leave it to the store or the partner company.
Ponzi scheme if you buy a share of some company? C’mon… The people that has a share can always get money back of what they have invested. Just be unselfish and inform people they all can get money back with their everyday purchases.
All the informations are out. People just think they will make a quick money. No it aint going to be quick but it will be permanent.
Mathematics dictates that the majority of Lyoness investors can’t “get their money back”.
Lyoness is dead in but a handful of countries. The second largest source of traffic to the Lyoness website is Greece @ 5.5% (Alexa).
As confirmed in Lyoness’ current largest market, Italy, only 16.6% of company-wide revenue is via shopping.
If Lyoness’ cashback was viable to recover invested funds, the percentage would be much higher. 84.4% of funds entering Lyoness in Italy are from direct investment into units.
And you’re going to argue with a straight face that the shopping is viable?
Furthermore cashback shopping doesn’t negate the fact that Lyoness is using newly invested funds to pay existing investors via direct investment in units.
Tell that to the investors who have been abandoned in every country Lyoness has flopped in over the years.
According to lyoness-corporate.com your down to 43 countries at the moment..
And the austian clouds maths Tell us its a ponzi.
888.888 cloud units a 1500euro (sold out)
Aprox 2.5% of stopping to investors.
Over 500k members before cloud started and just over 600k members at the moment.
After 2 years the first payment came to cloud investors a 750euro.
Is it possibole that 100k persons in austria shops for 10.000euros Evert month in 2 years? No! Not even one month. Total ponzi scam!
You’re wrong, AT Cloud had 8.888 shares.
8,888 * 750 SPs = 6,6 million SPs (Aprox.)
If you take in consideration 100k customers (no one knows for sure), for the waiting period (26 months), it’s around 3 SPs per month per customer, around 150€ in Shopping.
What we do know is that only 16.6% of revenue entering Lyoness in Italy was from shopping.
If cashback shopping was a viable method of running a Lyoness MLM business profitably 84.4% of revenue in the company’s largest market wouldn’t be direct investment in units.
Not withstanding 84.4% in direct investment revenue being used to pay existing unit ROIs is Ponzi fraud.
43 countries, pl at sl cz is under MyWorld. You can become Lyconet member without any “investment”. Just register in lyconet for free and skip all packages.
What you can and can’t do outside of the unit investment scheme doesn’t change the fact that majority of Lyoness’ company-wide revenue is attributable to the Ponzi scheme.
You can’t legitimize a Ponzi scheme with a free membership option, any more so than you can by tacking on cashback shopping.
In Norway in 2016, 9% purchase, 91% “investment”.
You missed to cvalculate everything…
8888 cloud units – 1500 Euro a piece equals 13332000 Euro
16,6% revenue in Italy from Shopping
9% revenue in Norway from Shopping
If we take for Austria – the median – it equals 12,8% from shopping
You claim that 100000 customers have under 26 Months – spent 150 Euro each month individually – this sum equals up to…
100000*26*150=390000000
As per your (Stupid/ridiculus) claim…
Austria Cashback World would have 180000000 income from shopping ((390000000/26)*12) on 1 year
Austria Cashback World would have 6153230,7 income from Clouds Sold ((13332000/26)*12) on 1 year
Your stupid reference equals a total income on 186153230 Euro per year for this fraud
That means – you state – in percent – that Austria is having an income from sales (Your imagination on 150Euro per customer and month) on extreme 96,695%
180000000/186153230
Just a quick math to show how stupid you are – that sum is nowhere near 12,8% , not even close to Italy and 16,6%
Just to show the reality on 1 year – with 12,8% income from sales….
6153230,7/0,872=7056457
7056457-6153230,7=903227 Euro per year
Lets play with 100000 customers – that means those customers are spending INCREDIBLE 9 Euro per year on the card…
Or 0.75 Euro per month….
Fantastic figures – I would LOVE as a retail owner to participate…
(Note: Yes – sarcasm)
LOL.
You know nothing of what you are talking about.
First you started talking about 888.888 parts, number that is obviously wrong, a basic search here at behindmlm gives the correct number: 8.888.
Second, customer clouds don’t pay in euros, but generate Shopping Points, that IF you have Discount Voucher Balance, those SPs are redeemed at 1SP=1€ rate. But, if you already redeemed your DV, shopping points go to the career plan, and you get paid accordingly (from 0.025€/SP to 0.0825€/SP). This is how their system pays, your knowledge of the comp plan is zero.
Your math is completely messed up, and no need for insults, no one is trying to convince you whatsoever.
I guys.
After a false new about Italian members inability to buy DVs know we have a discussion about Costumers Clouds.
(Ozedit: snip, see below)
Dude, your talking to more than one person.
We all know that you count in sp but its easier for people to understand your scam by convert to euro..
8888 my bad but no way austra have 150euro a month from members. Back that up with sales from lyoness.
@Xuxatola
There’s nothing fake about the official announcement from the AGCM.
Lyoness was fined for being a scam and is now illegal in Italy. Derails removed.
lol, this blog still claiming Cashback World is a Scam 7 years later.
I was here in 2012 lol, I will check in at 2026 again to amuse myself will all the ignorance 🙂
The only ignorance on display here is the notion that time legitimizes a Ponzi scheme.
It doesn’t. Neither does Lyoness’ cashback shopping.
(Ozedit: “what about” derails removed)
The Back-office that you put a a print screen was an non active one.
Lyconet and My World is operating and will operate .
You are wrong from 2012 until now . *Facepalm*
(Ozedit: more “what about” derails removed)
A “non-active” backoffice? Gawwwd.
First up total strawman. We quoted the AGCM’s own announcement.
No idea why you’re waffling on about backoffices, don’t really care.
But not in Italy, where Lyoness was found to be a pyramid scheme and fined 3.2 million euro.
Any MLM company, scam or not, losing its primary source of revenue (Italy provides 48.7% of website traffic as I write this), has to be in crisis mode.
So I get why you keep coming back with waffle and strawman rebuttals.
I invest in Lyoness units, people recruited after me and I eventually get a percentage of their invested funds.
Ponzi from day 1. If I facepalmed every time a Lyoness investor tried to defend the Ponzi, I’d have no face left.
The irony of course being that pretty much everyone who has defended Lyoness on here over the years has since lost money.
Always fresh new gullible morons to take their place though.
Yes inactive Back-office without the balance to buy DVs .
(Ozedit: spam waffle removed, this isn’t Facebook.)
Has nothing to do with Lyoness being a pyramid scheme, getting banned in Italy and fined.
Anything further spam waffle from you will be nuked. Have a nice day.
Oz,
Not entering the “it’s a scam or not” discussion, there is a difference between “banned” and “suspended”. Even the 3.2 million fine decision may be appealed, so it’s not ‘yet’ final.
Anyway, if you read the AGCM report, you will see that, the regulator “fined Lyoness and gave two months to submit a new marketing plan”, which must then be approved by the AGCM. This is not ‘banning’ a company from a Country. Of course we will se what happens next and the impact of this in LYCONET Business.
Still, at the moment you can make purchases with the cashback card and add SMEs in Italy. But everything that concerns LYCONET: Premium Membership, ESP, Customer Clouds, is indeed suspended.
Oh I’m sure Lyoness will appeal. But that doesn’t change the conclusion of AGCM’s investigation, that Lyoness is a pyramid scheme and by law is banned in Italy.
Lyoness has already canned the investment scheme in Italy. Seeing as that’s the meat and bones of the Lyoness MLM opportunity, RIP Lyoness in Italy.
And yes, banning the fraudulent business model responsible for 84% of company-wide revenue nationally is banning the business. Any company that loses 84% of its revenue overnight is dead in the water.
Fianlly Ponzi investors aren’t interested in “new marketing plans”, they’ll just leave (and hopefully kick up enough of a fuss when they realize their money is gone so that AGCM takes further action).
It seems like we are dealing with many scams in Italy. Apple and Samsung (Ozedit: are not MLM companies are therefore irrelevant.)
I have been a member of Lyoness/Cashback World for 4 years and bought my first shopping voucher for R500 (South African) and a starter pack (not sure abut the name). I gave the cards to family and friends.
Not one of them has bought a shopping voucher or a starter pack, and yet I have received my R500 back AND I have made more then R2 400 from their shopping. How can this be a scam?
Why is it that people who knows nothing about network marketing think they can buy a leg, do nothing and earn money? (Ozedit: derail attempt removed)
Because during those four years most of the money circulating through Lyoness has been new investment used to pay existing investors.
Anecdotal experiences such as yours do not change the fact that the majority of Lyoness’ company-wide revenue is attached to their unit/voucher Ponzi scheme.
A Ponzi scheme by definition is a scam. QED.
just created account under italy lyconet and i can buy enterprise cloud 2 limited edition discount vouchers i.imgur.com/gsqfnoV.png
That’s nice… but you didn’t actually invest anything. And it doesn’t change the fact that Lyoness has been banned in Italy and fined 3.2 million EU.
Meanwhile the IP address you used to leave a comment with is from Estonia, so you’re not even in Italy.
I was pulled into the lyoness card in 2015.
Shelled out a good chunk of cash to be a seller. Then I was told to shell out about 150 euros a month to maintain the seller status, and was stressed to invest into a cloud which after 3 years would pay out a lot of money.
What happened my money was suddenly discount vouchers and not cash. They are paid out apparently when you shop as a cash back. So when I use the card and buy stuff I get a drip of money from it.
Now the clouds are not the buzz. Now you can convert this into ecredit a new currency which is supposed to trade 1 to 1 euro.
To convert i have to buy gift cards then they will take my pretty useless vouchers and turn them into ecredit. But wait there is more, you cannot openly sell these before 2023 so again my money is locked into another invented value.
To convince everyone it’s claimed that this will be bigger than bitcoin with an incredible ROI. Also they will setup an online shop where you can buy almost everything and all trade will be with ecredit. Buyers use money to convert to ecredit, buy and so on.
So I’m taken back over the “new” this will be so big etc. A ton of money is going to be locked into yet another name for yet more years and many belive this is an amazing opportunity.
Anyway let me put in a couple of words more.
Why is there little shopping? Well the shops who are members are not cheap, incomplete etc. So if I use the card I actually don’t save anything. In fact I spend more than if I buy elsewhere in most cases. So I never use it as well.
Why pay 50 euros more per tire to get 2 euro back? And what about shopping point deals where you can use it to get 10% or 20% off? Only to see you can get the same discount if you ask.
And the shops who give 3% back means 1% back to you, and you might get 0,5% back from your “discount voucher” money you paid in and it takes forever to get back by letting the shop pay it back.
So I did not give more cards because I can’t say use this incredible energy company who is so “cheap” and give cash back on top when it’s almost 50% more than a non member company, they also lock you into a 1 year contract.
So I saved nothing, made actually nothing but lost because I can’t see I ever get my money back everything I put into it.
But for the ones believing, keep believing if it rocks your boat. Keep thinking a big chain will join, keep believing the next and the next with unbelievable ROI will happen.
I don’t i see this as lost cash and lost time I will never get back.
Welcome to the reality of Lyoness for 99.9% of the members….
There’s one way; you have to recruit everyone in your country and the next few countries over as “shoppers”.
Then you might get… half or so of it back… in three decades.
Uh uh! Lyoness is having some legal problems in Italy.
ilgazzettino.it/nordest/verona/lyoness_italia_diffida-4286759.html
Finally. I was beginning to think everyone who joined Lyoness in Italy was a dumbass.
The court rulings from Italy and now Norway are starting to bite the Lyoness Cashflow. Cashback is now being delayed:
facebook.com/771145199758660/posts/936669839872861?sfns=mo
Think about the following statistic… Approximately 70 % of people have a strong opinion on a subject they have no knowledge of.
I have read all the posts and have come to the conclusion that you guys are supporting the statistic!
It’s simple….try it out…then really commit and then…only then can you have a valid opinion. If you attempted a half baked effort you will loose! This applies to everything you do! Not complicated…you will fail…very easy not to admit you didn’t do your part.
So guys. This is my story. I joined. After 5 months I have started earning. It’s not a scheme. This is a fact…
100% of people on lyconet who are committed to the process are happy and is reaping the rewards.
Please don’t make up bullshit and then try to pass it off as a factual statistic.
False. I don’t need to drive my car off a cliff to be of the opinion that it is not good for my health.
Similarly one doesn’t need to sign up to a Ponzi scheme to realize they are bad for your wallet.
In a Ponzi scheme like Lyoness it is mathematically guaranteed that the majority of investors will lose money. There is a point where it doesn’t matter what effort you put in. Potential suckers will run out and there’ll be nobody left to recruit.
You stealing money from people who join Lyoness after you doesn’t change the fact that it’s a Ponzi scheme.
And before you rattle off the “BUT WUTTABUT MUH SHOPPING?!” spiel, Norway and Italy have both proven shopping in Lyoness is a ruse. Which we’ve been reporting for years.
The only way to make money in Lyoness is to invest and then recruit others to invest. This is why every Lyoness market eventually collapses.
Hi,
I am about join Cash Back World and just want to say, that I am from ex comunist country ( read: we have political crisis, the healt care system is colapsing, the big bureaucracy system, taxes are increasing, the per capita income is declining etc…).
I am an owner of a physical store but most likely the last one who has not entered yet in Cash Back World and Lyconet in our city.
Just want to say what are the big merchants doing here in my country: they ordered and buy CBW cards and they distribute them for free to their final customers.
They calculate that investing the money in marketing ( media, social media etc…) is less profitable than buying CBW cards and distribute them with their logo among the customers.
I talked to an owner of a big merchant chain yesterday, his company bougt 20.000 CBW cards. Do your own calculation about the cost of the cards, the instant income via CBW and future income from their customers (in therms of loyalty ).
What is your opinion?
Forget about opinions. It is a fact that in every country it has opened Lyoness cashback has collapsed once the affiliate investment recruitment scheme collapses.
Your country sounds doesn’t like it would have a healthy retail environment at the moment. But it’s probably ripe for investment fraud.
By signing up your customers you’ll be selling them lies just to make a little extra money.
Thanks for your opinion.
But you missed the point: I will not signing them up. I will give away them my CBW cards with logo of my company.
I assure you I’ve missed no point.
You’ll be invited to invest, the same as the other greedy store owners. You’ll be told your shoppers will contribute towards the maturity of your invested units.
Those you hand cards out to will be recruited under you. You’ll tell them that just by shopping they can earn cashback.
That is the lie.
The amount of shopping required to make anything is ridiculous. The only people who make any money in Lyoness are the scammers who invest, and then recruit investors and shoppers under them.
Inevitably the collapse of Lyoness in your area will result in widespread investor losses.
You and your greedy store owner friends won’t be among those who lose money. But you will lose all credibility and live the rest of your life knowing you abused the trust and good will of your customers.
You can rephrase what you will do however you want. It is what it is and has played out in many countries before yours over the last decade.
Having lost Italy, Lyoness desperately needs new suckers to keep it running. Your country certainly sounds ripe for pillaging.
Can someone please tell me what is the authority of this agcm in Italy and how much influence they have?
And I am interested about the he Lottery and Foundation Inspectorate in Norway and how powerful is this document bekm.eu/wp-content/uploads/2019/04/Norwegische-Beh%C3%B6rde-13.03.2019.pdf.
How much influence does The Lottery and Foundation Inspectorate of Norway has?
The AGCM is Italy’s FTC equivalent. They have similar regulatory powers in Italy.
The Norwegian Gaming Board is like a combination of the FTC and SEC as far as MLM regulation goes in Norway. I can’t speak to the other areas they regulate.
Both are top-tier national regulators financed by their respective governments.
Oz , in Germany there will be the biggest lyoness scam event ever. 65000 people attending, superstars like Pitbull, tony Robbins etc will be there and until yet no sign of banning it it in gernany.
That’s on BaFin to take action.
You’d think with Austria clamping down Germany would follow suit.
Today +30.000 strong in Germany and not a sign of regulators nor the police. Indeed they contracted Tony Robbins Pitbull and Eric Worre to do some trainings.
facebook.com/photo.php?fbid=10215154189710179&set=pcb.10215154190590201&type=3&theater
As you can see there’s no sign of a crisis in this company!
They seem to have a ball there.
facebook.com/lyconeteu/photos/pcb.2135269913249067/2135269669915758/?type=3&theater
Gotta keep up appearances. Looks like enforcement needs to step up in Italy following the pyramid scheme decision.
Investment must still be flowing in.
Some folks believe that when a company hires convicers… I mean, paid motivators to speak at an event, then that company is legit and no regulators will step in to arrest everyone in the room.
The thousands paid in fees to the most influential speakers is usually done with the intent to keep distributors from leaving the company anytime soon.
It becomes a tax write off at the end of the year.
The speaker has nothing to do with the legitimacy of a company and whether the management of the company does shady stuff or not down the line.
The speaker merely talks, gets the crowd fired up, hot and bothered, collects the rest of his fee, and gets to sell more of his products and services at the end of the day.
Fortunately, MyWorld is operating normally in Italy and all the other 51 countries, so this article is not quite correct this time.
There are more than other 50 countries on the way to welcome Myworld, such as Albania, Belarus, Ukraine, Japan, Egypt, Argentina etc.
The future is now!
^^ This is what desperate denial looks like.
The Italian fine and pyramid finding is there for anyone to read. It is very much real.
At the present time, outside of Italy Lyoness is dead. They were a thing in Europe last year (Albania etc.) but, like everywhere else, that seems to have collapsed.
Best of luck with the scamming.
I didn’t know about lyoness until about 30 minutes ago.
All of you who commented earlier about how great this company is, did you really think you could sign up for a membership, for free, and get money back on your retail purchases? You can’t be that gullible.
The structure of this “company” is a textbook pyramid scheme in organization, they just added the extra step of cash back (with huge strings attached) to throw authorities off the scent.
You realized what this was, then decided you knew enough people to trick. A
fterall, you had to: there is a monthly upkeep fee for “sellers”. That’s there to bleed you so you hunt harder for people to trick.
You knew over 80% of the people involved in this will be left with nothing to show except a lighter wallet.
But… if you truly did not realize this, I have some bad news for you… you are the chump. Better luck next time.