Vienna Court of Appeal upholds Lyoness T&Cs are illegal
Alleging Lyoness’ Terms & Conditions were “incomprehensible”, the Association for Consumer Information (VKI) in Austria took legal action against the company back in 2013.
In their lawsuit VKI referenced “61 vague and inexplicable clauses”. The consumer advocacy group claimed they’d ‘never seen so many incomprehensible clauses in one contract‘.
The contracts signed by the members contain many clauses the violate the applicable Austrian legal requirements.
Therefore the VKI has filed a lawsuit against Lyoness, through which we want to force Lyoness to stop using these clauses. As well as, most importantly, prohibiting them from relying on the content of those contracts that were signed earlier.
VKI sought to legally challenge the validity of Lyoness’ Terms & Conditions, which would force Lyoness to process refund requests from affiliates.
VKI won their lawsuit last year, however Lyoness were quick to file an appeal.
The Vienna Court of Appeal has now heard the case, with a decision made earlier this week rejecting Lyoness’ appeal in its entirety.
In handing down the decision, the Court of Appeal upheld Lyoness’ Terms & Conditions were full of “confusing rules”. This is a violation of Austrian consumer protection law.
Lyoness had argued that the clauses in question had since been “largely adjusted”, with complaints from investors prior to the purported adjustments being addressed. As I understand it, the complaints referenced were mostly, if not all, refund requests from Lyoness affiliates who lost money in the scheme.
Part of Lyoness’ adjustments saw them create Lyconet in 2014, in an effort to separate the AU investment scheme from the cashback side of the business.
In rejecting Lyoness’ defense, the Court of Appeal has paved the way for Lyoness investors in Europe who signed up prior to 2014, to claim refunds.
In a press-release published by VKI’s legal department, Peter Kolba stated
Lyoness can no longer rely on the repealed or meaningful equal terms. VKI will now help sufferers throughout Europe to get back money (they) paid to Lyoness.
Back in January, Lyoness was also found guilty of deceptive business practices by Vienna’s Commercial Court.
The company was ordered to refund the affiliate €6000 EUR plus 4% interest backdated three years.
great legal victory for the VKI, austria.
i just hope that lyoness will not be able to settle the civil claims, and continue unabated across the world.
what is needed is a ‘pyramid scheme’ finding against lyoness, to stop it in its tracks.
I think this is the best verdict tnat can ever happen to Lyones memebers. Wheather Lyoness is pyramid scheme of some kind or not, it is not entitled to keep disgrunted members money if they ask for refund. To date Lyoness referred to T&C clauses doing so, now they can’t. Customer protection law is already moreless unified across European countries, so if one did not accept new T&C’s in November 2014, there’s legal ground to get money back without any purchase.
see the link, it is original VKI statement and court sentence in pdf file for download:
Portugal consumer association warns against Lyoness and Lyconet: sol.pt/noticia/501255
wow, “in 4 years around 10 complaints” … Really impressive.
Most victims of Ponzi schemes don’t complain. They’re either too embarrassed and/or receive threats from their upline and instead chalk it up as a loss.
Although Portugal is a small Country, last Year alone DECO received more than 700.000 complaints of all kind. MANY included pyramid schemes like Geteasy etc.
What’s your point? It seems for Lyoness and Lyconet 4 is enough to trigger such a warning.
Article updated with specific Lyoness Terms and Conditions deemed illegal by the court.
@Oz, this T&C’s you listed are coming from decision of polish court, and OCCP case against Lyoness. It has nothing to do with Austria nad VKI.
Damn you’re right. I’m removed the update and will add it to the OCCP case article tomorrow (will have a closer look and see if it needs a separate writeup).
Thanks for catching that. Following Lyoness litigation in EU is as confusing as dissecting their business model!
I know from lawyer representing some Lyo victims in Poland the sentence can be still appealed but Poland is the second country that came to conclusion Lyoness has to return downpayed money because it is illegal to refuse it.