Norway reopens Lyoness pyramid scheme investigation
Back in 2014 the Norwegian Gaming Board wrapped up an investigation into Lyoness. The conclusion of the investigation saw the Gaming Board confirm Lyoness ‘does not engage in illegal activities in Norway‘.
Analysis of the Gaming Board’s official report revealed the regulator primarily relied on marketing material provided by Lyoness in their investigation.
Three years later, the Gaming Board has now reopened their investigation into Lyoness.
The Gaming Board’s announcement was made on June 16th.
In it, the regulator claims that after identifying Lyoness as a pyramid scheme, the company “adapted themselves to legitimate business” by creating Lyconet.
As far as I’m aware Lyoness has never publicly admitted to creating Lyconet in response to regulatory findings in Norway.
BehindMLM reviewed Lyconet in 2014 and concluded Lyoness was still operating as a Ponzi scheme.
“Accounting Units” were renamed to “Balance Categories” and instead of tracking raw dollars Lyoconet instead tracked generated “shopping points”.
Otherwise it was the same old story. You sign up as a Lyconet/Lyoness affiliate, invest your money in points and then get paid a ROI by recruiting others who do the same.
Lyconet even ramped up the Ponzi aspect of their offering, by introducing a passive €1500 EUR investment scheme in 2015.
Citing new “tips about Lyoness and Lyconet” from the public (media reports cite over fifty), the Norwegian Gaming Board advises they’ve sent Lyoness “information letters” regarding the country’s pyramid scheme laws.
A response to the concerns sent to the Gaming Board by the public has also been sought.
No doubt Lyoness’ lawyers will try to bury the concerns with mountains of marketing material, as they did the first time the Gaming Board investigated.
Whether or not that works for a second time remains to be seen. The ongoing complaints about the company suggest Lyoness affiliate losses have continued, despite pseudo-compliance introduced by Lyconet.
Although there’s no concrete news of legal action being filed, an interview by Bergensavisen revealed at least one Norwegian Lyoness affiliate is attempting to recover their losses.
Speaking with attorney Josef Fromhold, he revealed that one of his clients was a Lyoness affiliate in Norway..
Bergensavisen did attempt to reach out to the affiliate for comment but she declined through her lawyer.
Fromhold estimates that currently there are around a thousand Lyoness affiliates involved in civil action against the company across Austria, Sweden, Germany, Greece, France, Latvia, India and Australia.
Footnote: The Bergensavisen report cited in this article is not available to the public (hence no link). I was made aware of it and cited the original publication via a reader.
Update 20th January 2018 – On January 11th the Gaming Board sent Lyoness a letter informing them of their findings.
Lyoness has been declared an illegal pyramid scheme in Norway and ordered to immediately cease all business operations.