Norwegian Gaming Board suspects Lyoness is a pyramid scheme
Citing the ongoing receival of ‘many tips and questions from the public asking if Lyoness is a pyramid scheme‘, the Norwegian Gaming Board has provided an update on their current investigation.
Following their first investigation into Lyoness in 2013 the Gaming Board concluded that, while they might have once operated as one, Lyoness’ current business model didn’t classify them as a pyramid scheme.
Unfortunately it was later revealed the Gaming Board’s decision was primarily based on marketing material Lyoness had provided.
This didn’t address the root of the problem (that Lyoness operates as a pyramid scheme), and so the Gaming Board continued to receive complaints and queries from the public.
Earlier this month the Gaming Board announced they were reopening their Lyoness pyramid scheme investigation.
The since-published update reveals the Gaming Board initially contacted Lyoness on April 6th, 2017.
In this letter the Gaming Board reiterated Norway’s pyramid scheme laws and informed Lyoness they’d received ‘around fifty tips and/or enquiries about Lyoness in the past year‘.
According to the tips we have received, Lyoness / Lyconet permit to participate in a pyramid-like sales system, where they receive an opportunity to earn income by rewarding new members.
The tippers state that the size of the income of the company and affiliates largely depends on how much money one pays to participate and the number of new members being recruited.
The Lottery Authority has also been informed that some individuals have paid or are considering paying hundreds of thousands NOK to Lyoness / Lyconet to get the opportunity to get paid ten times as much in three years.
Furthermore we have received information about the recruitment of participants right down to the age of 18-19 who place their savings money in this system.
For most of the people who contact us, it is unclear where the deposit is placed in Lyoness / Lyconet, and the source of the promised payouts.
The impression most are left with after Lyoness meetings is that it is the recruitment of new participants into Lyoness / Lyconet who finance the payments, and not the sale of real product.
In several of the tips we have received, it is argued that Lyoness / Lyconet holds meetings in which they give incorrect and misleading information about the business of the company and companies they collaborate with.
Among other things some of the tips indicate that Lyoness / Lyconet does not have a direct cooperation agreement with all the companies they refer to at their meetings, and that they only pay out a theoretical salary that can be used to act for.
Some have also reported attending meetings where aggressive and classic tricks of pyramid companies have been used, like “You have to hurry now, soon the opportunity will disappear”.
The Gaming Board asked Lyoness to clarify their concerns.
Lyoness replied via letter on May 30th, however the details of their reply have not been made public.
What we do know is the Gaming Board wasn’t satisfied with their answers, prompting a followup “for further explanation” on July 14th.
The Gaming Board find grounds for considering investigating Lyoness Norway AS’ and Lyoness Europe AG’s operations in Norway, which violate the pyramid provisions of the Lottery Act.
This is because the business of Lyoness in Norway is in fact a pyramid-like sales system where compensation is paid for the opportunity to earn income due, in particular, others being recruited into the system and not the sale or consumption of goods, services or other benefits.
Lyoness’ May response appears to have attempted to differentiate Lyoness’ global operations from those in Norway, as the Gaming Board makes a point of clarifying they are only investigating Lyoness with respect to business in Norway.
One argument seemingly raised by Lyoness is that its affiliates might be disseminating false information about the business.
The Gaming Board responded by stating
if it were to be that the tips we received are based on a wrong perception of the actual business of Lyoness, this also raises questions about the marketing activity of the company in Norway and potential violation of other laws that are intended to protect consumers.
This includes the use of unfair terms and conditions and misleading and aggressive marketing.
On July 30th the Norwegian newspaper Bergensavisen (BA) published an account of a Lyoness meeting held by local affiliates.
The outdoor venue Una at Bryggen in Bergen has been a partner company with Lyoness’s distribution program for several years and is widely used as a venue for marketers in the Lyoness system.
One of the Norwegian main characters in the network, Terje Duesund, is an owner of the venue.
Over a beer at the brewery Una at Bryggen, she (a Lyoness affiliate) tries to persuade BA journalists in attendance to pay to become a sales agent in the controversial, international business Lyoness.
She is casual, well dressed and speaks fast – and clearly.
She does not know that it’s a BA journalist she’s talking to, and states you’d have to be an idiot not to pay 430 kroner to join the controversial marketing system.
And she strongly recommends paying 19,000 kroner to become a “premium” marketer. Then you get the chance to earn much more money, she insists.
The Gaming Board meanwhile also included media reports of judicial decisions requiring Lyoness to refund affiliate investors “who feel foolish” in their followup letter.
Such decisions have been made in cases filed in Switzerland, Austria and Poland
Lyoness has been given until August 15th to respond to the Gaming Board’s requests. Stay tuned…
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.
Are you sure its 19000£? And not 19000nok
Had another look at the source material. Yup, it’s kroner.
Not sure why auto-translate stuck a EURO sign there. Thanks.
Tic tac tic tac…
Aug 15th deadline has come and gone. No updates on the Gaming Board wesbite. Will check back in a week.
Will not be an update for some time….
So – Lyoness probably have responded, but now the gaming board needs to review the response before making any decision etc.
Have read the compensationplan (given from my friend) Have also seen my friends “Unitsystem” and she have had a few bonuses payed out (3 years or so).
She talkes about Easi Shop Plus now and that she buys discount vouchers every month and get units from that! Can anyone explain this?
I mean, can you actually buy a unit and after a few years have the bonus explained in their compensationplan! She is a “hardcore onlineshopper” and buys a lot via online and get money back from the vouchers!
What is easi shop plus?
Cheers
The vouchers are just a vehicle for affiliate investment in Shopping Units.
Same old story. Lyoness affiliates invest in shopping units, get vouchers, use vouchers to invest in more units and eventually collect a ROI if they recruit others who do the same.
You can use the merchant network legitimately but that doesn’t excuse the core of the MLM opportunity (which is and always has been invest in units + recruiting others who invest).
Ok! As I understood my friends explanation Easi shop plus is an “add on service” to buy monthly vouchers which gives you a unit which later on gives you payout as described in their compensationplan! Is this correct or wrong?
Do you actually have to recruit others to take part of Easi shop plus? She said no to this question!
If it’s an add-on service not run by Lyoness, then sounds like an affiliate is selling vouchers through their own platform.
They get a ROI, you’re left with vouchers. Might be worth if it you want to shop but if you’re chasing ROI payments it’s a dead-end.
You can invest in Lyoness directly to get vouchers, so why would you buy them from another affiliate?
Actually she says its run by Lyoness. She then monthly get a couple of units placed randomly in other unitsystem, rather than her own. She says this is better cause she doesn´t have a big personal network that consumes a lot, only her own shopping.
Sorry, thought you knew about this Easi shop plus monthly thing….
Can you digg into this?
If it’s run by Lyoness then yeah, technically you don’t need to recruit to get units put under you. They will happen over time through spillover.
This is true regardless of whether you spend through Easi Shop or the merchant network (probably the same thing).
Given the amount of money required to generate said units though, you’ll be lucky to receive one ROI payout in a few years time. That’s if the downline you’re in doesn’t collapse before then, which most do.
Either way, your friend is trying to pull a fast one on you.
No, she actually doesn since I already have a card thorough a local store! But we discuss the Lyconet thing pretty hard, I don´t have the money to spend anyway.
Thats the thing I don´t get: why should she loose her ROI if her line collapse? She doesn´t have a downline/upline/ more than her self! She signed through their website as a “stand alone member” and the units are in national systems!
So its true as she says that she tecnically can pay for a unit every month with Easi shop plus and after a few years (if lucky) regardless of her own network? Damn! I´m loosing the bet!
Thx anyway 🙂
Sorry, missed the point before:
So its true as she says that the only thing she technically have to do is to pay for a unit every month with Easi shop plus and get her ROI after a few years (if lucky) regardless of her own network?
Ok! Thx
She would have been put under someone else’s downline. Anyway units don’t magically appear under you unless someone in your upline/downline generated them.
That´s exactly what I told her but she says it´s a differ between her Personal Unit system and the National systems.
According to her the Personal system needs units from your own or your network/downlines shopping. But with the National systems your own downline isn´t needed since your unit is put into that system and then evolves from other peoples units also put in that system every month.
So according to her she gets units into those National systems via Easi shop plus.
No, she is all her own, no upline or personal network, she´s not interested in networking, only get cashback!
Yepp, would be smarter to grow her network I belive! Her choice 😉
After you get 7 units in your Personal Balance System, you can choose to put your other units in the National Systems, which are randomly chosen by the software (each month different country).
How these National Systems are filled with units is different(and a little complicated) story.
Well it take 70 units to mature one and then the 70 gets free to mature. To get a unit to mature it take 3-6 years in “esp” according to the sekt People.
After 3-6 years of monthly pay so its just a fuck up system that neads to grow 70 Times for Evry level.
How can it be 70 times for every level? That is wrong! Do your math!
A unit requires 70 to mature, thats shown in their compensation plan, but for every new level in the system it “only” requires a double up, not 70 times!
2 gets 4 gets 8 gets 16 gets 32 ….. Thats not 70 times for every level!
35 + 35 is 70!
Any updates?
Can anyone then explain why the Norwegian Gaming Board states on august 7:th that they found Lyoness earlier running a pyramide scheme but now it´s all corrected!
In Norwegian: \lottstift.no/pyramide/lyoness/
As I can tell they find Lyoness free of charge on that point!
They’re talking about the 2014 investigation – https://behindmlm.com/companies/lyoness/norway-lyoness-does-not-engage-in-illegal-activities/
The Gaming Board concluded Lyoness was running a pyramid scheme but then created Lyconet. The Gaming Board didn’t look past Lyoness’ marketing material and they concluded their investigation.
Three years later the “I’ve been scammed” reports are still flooding in so they’ve reopened their investigation. No updated since August 7th.
Any news? How is the Gaming board progressing?
How can “I’ve been scammed” reports flood in? In what way have people actually been scammed?
As far as I know, now one have actually lost their money! They didn´t have the patience wating for it! Big difference if you ask me!
Broken promises don’t count as scams, huh? The fact that you’re making excuses, based on only your view (“as far as I know”) shows how weak your reasoning is.
I did have an update on this yesterday but then my phone went and died and I lost half a day trying to fix it / reverting and setting up an old phone that hasn’t been used in years.
Will publish an update today apologies.
How long you have to wait for a ROI is irrelevant. Lyoness using newly invested funds to pay off existing investors through its AU scheme makes it a scam.
Ergo those who sign up and invest and have nothing to show for it have been scammed.
@Kasey Chang:
Broken promises is always bad. The thing is that those people promising big ROI in short term are the bad thing about this. Everyones should be told that the ROI is to be expected whitin a 5 year period. Everything before should be concidered a bonus.
I don not base my opinion om my own thoughts only, but on what I see for my self and what is known to be correct. As I wrote, those who gave up their Lyconet ID in 2014-15 have actually lost a great ROI today. That´s what I´m trying to say!
If people find this a scam it´s not because they actually lost their money but that they thought the ROI should appear earlier!
So you regard this as an investment?
No! It´s an opportunity to take advantage of the ongoing consumption around us! Over time! Not over at week!
So you put in money and “over time” you “take advantage of the ongoing consumption around us”, i.e. you get money back?
Sounds like an investment to me.
Well, if you put 100 USD in and get 1000 USD back it´s a a form of “investement”.
The point missed is that 80% of the value given from a Unit have to be used for shopping at a Lyoness connected company. You don´t “invest” 100 USD and get 1000 USD cash back.
So, the company benefit from this system! And you as a customer benefits! Is that a bad idea?
Don´t think so!
You can get the shopping part of your ROI in vouchers and use those vouchers to reinvest in new units… at least that’s what was in the Lyconet compensation plan last I looked into it.
Well, take 80% (ROI Voucher) and get a new Unit in “the chase of the 20% cash” is a stupid thing to do.
I will use those 80% Voucher value to shop in Lyoness stores and the get the whole 80% back right away!
Which is why so many people lose money in Lyoness. Yet that’s how the investment opportunity is marketed.
Any news?