Summary of the ACCC Lyoness 5-day trial
Last Friday saw the conclusion of a five day trial which saw Lyoness defend pyramid scheme allegations, brought about by the Australian Competition and Consumer Commission (ACCC).
At the conclusion of the trial Justice Flick reserved judgement. And while I had hoped we might see a judgement handed down this week or the next, it’s been revealed his decision is not expected till around the end of the month.
What we can provide you in the meantime though is a brief summary of the proceedings as they occurred.
As per a source who attended all five days of the trial;
- None of the defendants attended the trial despite Werner Kaiser being in Australia conducting meetings in various locations.
- Lyoness’ office is only 5 minutes walk from the Federal Court Of Australia yet Lyoness also failed to appear.
- The matter was run by Lyoness legal representation of 2 barristers and staff from the legal firm only.
- ACCC evidence showed that 1933 Australian Consumers become Premium Members prior to April 2012, yet Lyoness denied business activities prior to April 2012 in their defence statement.
- The ACCC put forward no evidence of any Lyoness member that ever topped up the full amount of the $3000 down payment in respect to Premium Memberships.
- The ACCC asserted that down payments have “no economic value”.
- Andy Hansen & his Global Go Getters Team were front and centre to the promotion of Lyoness from September 2011 onwards.
- The ACCC seized documents by way of Executed Search Warrant on Lyoness Australia Office in Sydney in September 2013, those documents revealed that Lyoness was mainly looking to recruit Premium Members.
That last point is in line with Lyoness CEO Hubert Freidl, who previously acknowledged Lyoness is about direct acquisition of AU positions over shopping.
- Upon discovery Lyoness had no response to what were the member benefits of Australian residence that paid $3000 down payments for Premium Memberships prior to April 2012.
- ACCC evidence showed that up until March 2012 the master records showed no cashback recorded indicating that no shopping activity took place, Lyoness disputed the records.
- ACCC evidence showed no sales activity with small to medium-sized enterprises prior to January 2013.
- ACCC evidence showed 54,000 Lyoness members as at October 2013.
- ACCC evidence showed only 12 people achieved $30,000 in spending in 2013.
- ACCC showed evidence of an email correspondence between Andy Hansen “Global Go Getters” and Steffen Muller “Lyoness Managing Director of Asia”, approving an updated membership application and a process to continue to register Australian Consumers to join Lyoness. Hansen’s email confirms some 1500 Premium Memberships, Muller advises not to circulate the documents outside of Hansen’s circle as a warning that the pre-launch activities could create problems for Lyoness. In Lyoness’s statement of claim Lyoness denies activities prior to April 2012.
- The inducements of Lyoness advertising campaigns were by Lyoness would distribute an equal portion of 1 million customers to the first 500 Premium Members was tendered in the affidavit of John O’Neil (Lyoness Premium Member). The 1 million customers were promised to achieve 3 Lyoness shopping units each, these representations were made in Hansen’s Official Lyoness Pre-Launch Webinar Presentations as part of the 4 phase launch of Lyoness in Australia.
Till Justice Flick publishes a decision on the matter later this month, stay tuned…
Update 14th October 2015 – After almost three long months, a judgement date has now been set for the 23rd of October.