Lyoness respond to ACCC pyramid scheme lawsuit
Following on the heels of earlier news today that the ACCC regulatory body in Australia are suing Lyoness for being a pyramid scheme, comes a response from the company.
Hollow rhetoric and colossal amounts of waffling?
With a purported 50,000 affiliates as of May 2014, news of Lyoness’ pyramid scheme lawsuit woes in Australia has hit the mainstream news.
News.com.au, owned by News Corp Australia, have published a response from Lyoness regarding the lawsuit (which I believe was also just in the last few hours forwarded to Lyoness affiliates):
Lyoness rejects allegations raised by the ACCC, and will vigorously defend the proceedings commenced by the Commission on 28 August.
Lyoness is a shopping community, customer loyalty program and network marketing business. Benefits are exclusively generated by shopping activities within the Lyoness community.
Members receive benefits when they shop, whether they introduce other members or not. Lyoness members may introduce members and receive benefits when the new member shops in the Lyoness community, but no benefits come from the introduction alone.
Lyoness has been active for 10 years and in none of the 46 markets in which it is active has Lyoness been found guilty of or convicted for operating a pyramid scheme.
Over four million members take advantage of the Lyoness benefits at over 40,000 loyalty merchants around the world. In Australia, there are now 780 Lyoness loyalty merchants, including many small and medium sized enterprises.
Lyoness is committed to full compliance with the law and to dealing honestly with Australian consumers.
Daily business is not affected. This court action has no effect on Lyoness members, loyalty merchants or staff, and Lyoness may be contacted by them in the usual way.
Since the proceedings are before the court, Lyoness will make no further comment to media.
Talk about mountains of waffle whilst failing to address anything remotely related to the AU investment scheme the ACCC have taken issue with…
For starters, if you’re going to reject something, how about stating why? And good luck defending the “allegations”… correct me if I’m wrong but the ACCC have a pretty decent track record when it comes to prosecuting scams.
The bottom line is that when a premium member joins and invests in the scheme, those who invested earlier benefit. Whether this is incremental (one new investment closer to a ROI payout) or total (triggering a ROI payout) is neither here nor there.
Pages and pages of legalese pseudo-compliance explanations might have worked in Norway and over at MLM Helpdesk and Norway, but taking on the ACCC is going to be an entirely different matter.
And what’s this about “daily business is not affected. This court action has no effect on Lyoness members, loyalty merchants or staff”?
If the ACCC have their way via requested injunction(s), it’s game over for Lyoness affiliates and the company in Australia.
Speaking of Lyoness affiliates, the News.com.au article also quotes the ACCC clarifying where Lyoness affiliates and merchants currently stand:
The ‘premium’ membership, under which members can participate in what the ACCC claims is the pyramid recruitment side of the scheme, costs $3000.
“$3000 is a good number, but there are all sorts of inducements and a lot of pressure on members to spend more and more money in the scheme,” he said.
Under Australian Consumer Law, it is illegal not only to establish or promote a pyramid scheme, but also to participate in one in any capacity.
Despite this, Mr Sims indicated individual members and the retailers themselves — some of whom had been encouraged to recruit new members — would not be targeted by the ACCC.
Meanwhile two years since it was published and over a thousand comments left on the BehindMLM Lyoness review itself, not one single Lyoness affiliate has been able to explain away the account unit investment scheme.
But hey, best of luck to Lyoness quoting irrelevant marketing rhetoric in court…
It’s about time….I know that the SEC is aware of the AAAC action and hopefully it will lead to an eventual US action against these people.
The problem is that the SEC, although full of smart people, are undermanned to handle the number of scams being perpetrated on the American public. When the SEC does take action, they do a great job of prosecution.
Strangely enough, MasterCard, yes, the MASTERCARD, have partnered with Lyoness to produce a MasterCard sponsored Lyoness card…..very strange that they agreed with Lyoness.
Have they really though? Or has some third-party payment processor just risked their MasterCard approval by offering Lyoness a branded card using their MasterCard access?
OMG… Oz you will never get it even when the AAAC is going to approve Lyoness. Yes there will be even 3 Mastercards. Yes directly with MC signed.
Cheers you haters keep writing about LYO.
Uh… the ACCC have filed a lawsuit against Lyoness. They aren’t going to “approve” anything, the investigation is done and dusted.
The level of brainwashing in LyoliderPL is formidable. Good luck m8.
There are 3rd party services like this one prineta.com/prepaid-debit-card-program-cashback-rewards-mlms-membership which offers Mastercard debit cards for MLM companies.
Lyoness probably uses simillar service and packed with same bunch of lies as with every other parthership, boast around how they have some special deal with Mastercard.
It’s almost funny how they always try to hide behind some legit company.
Yeah, let’s not forget all the “Hay guys, we’ve partnered with (insert multibillion dollar retail corporation here)!” crap, when infact all they did was buy some giftcards.
Lyoness is all about using third-party names to push non-existent legitimacy.
Lithuanian press mentioned that local Consumer Protection Body had made fiscal check on bank acount of Lyoness Lithuania subsidiary – as result it was concluded that participants make money through shopping only and no recruitment based income is offered by Lyoness.
Well either one of three things happened then:
1. Lyoness don’t keep invested AU money in the bank account that was checked,
2. They think deposits made with Lyoness which are used to fund AU maturity payments somehow constitutes shopping (/facepalm) or
2. They didn’t really check anything, and instead just took the 395 page legal jargon document Lyoness no-doubt sent them when they became aware of the investigation at face value.
It’s a Ponzi scheme in any event. Regulators need to focus less on recruit-based income and whether or not unregistered securities are being offered.
Lithuania isn’t going to be an anomaly. If they established how many affiliates who have received commissions had invested in AUs, they’d soon discover Lyoness has little to nothing to do with shopping.
Well, there’s no “money for recruitment” in fact – the best payout is when you manage to encourage your EXISTING downline to “downpay” AU 😉
Frankly, financial aspect of the fraud is not sophisticated as much as it may look at glance, but the way how the delusion unfolds is extraordinary IMO.
I have seen unintentionally leaked “Recruitment-Howto-Training” footage performed by one of them in front of others, where there are some simple tricks presented, telling that its proven knowledge assed by Mario Kapun, Lyoness Board Member – “tell to your family “YOU MUST support my bussines by shopping” – ppeople usually need some time to get mature for Premium Partner payment” or “just mention Lyoness in few words and act as you do not understand everything to convince your prospect to come with you to see your upline an his presentation”.
That’s fun! 🙂
My thoughts on the Lithuania investigation: https://behindmlm.com/companies/lyoness/lithuania-botch-lyoness-investigation/
Time for some levity here….even the inimitable Troy Dooley claims that the ACCC action means nothing…..he claims on his site that he “hasn’t spoken to Corporate” about this.
Well, anyone who would pay this clown anything for counsel is indeed questionable. Of course, we all remember Zeek and the fine Dooley paid to SEC for peddling Zeek.
Let us not forget Troy Dooley in on the Lyoness payroll…
And his soiree down to Lyoness HQ in Florida…
And Dooley’s 2 soirees to SoCal…….he’ll dance for anyone with a nickel apparently…
My experience with Lyoness has been excellent. They say right up front it’s all about shopping.
Too bad about the whole AU investment scheme but.
Dooley was also very excited about Zeek Rewards.. Now shut down.. Dooley signs the song for the people with the right amount of money it seems..
If the FTC shut down FHTM I am concerned about any company that charges a fee to join and charges for a monthly website.. 3k to make money is a red flag for me.. Concerned..
Hi to all people that question Lyoness that’s now in its 12th year, please do some legit research before saying something one way or the other.
With Salesforce partnering with Lyoness and the strategic alliance with MasterCard YES, MASTERCARD DIRECTLY!!! ( to prove this, the Lyoness MC has the Lyoness Cashback card in the chip or stripe of the card and when using it by a Lyoness SME you automatically receive the cashback and shopping points that the SME has agreed to pay on top of the shopping points for using the MasterCard.
^^ None of that has anything to do with investing in accounting units (or whatever the new name is).
How about you do some legit research hey? Smoke and mirrors puffery might work with your marks but it won’t get you very far here.
See the problem with using that argument to defend a ponzi or pyramid scheme ???
Sent them 10 grand for International unit’s, supposed to be positioned on the top of their Pyramid and then become a millionaire in 4 to 5 years…. 4 years has passed and nothing… what a scam!
Don’t imagine for one second you’re an orphan, John
That is the sad reality facing 90+% of the people who become involved with “opportunities” such as Lyoness.