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…