Tuesday, 5 June 2018

LYONESS - Court Cases From Around the World

Lyoness has been named in Court cases around the world:

'The (Norway) Lottery Authority has concluded that Lyoness is an illegal pyramid-based conversion system.'
4. June 2018

'The Graz discount company Lyoness, which recently renamed itself Cashback World, is no longer allowed to do business in Norway. The country's gambling authority has classified Lyoness as an "illegal, pyramid-like selling system". Lyoness must stop its activities immediately. The company wants to appeal against the decision.'
12th June 2018

'Already in January, the Norwegian gambling and foundation supervision "Lotteri- og stiftelsestilsynet" decided that Lyoness was an illegal distribution system. Lyoness objected to this first official assessment, but failed.

12th June 2018

January 2019

ITALYItaly have BANNED Lyoness and accuse them of being a ponzi scam.

Lyoness: Following Norway, Italy now also prohibits Lyconet practices!

The Italian competition authority (AGCM) adopted a decision (19 December 2018) – as the Norwegian competition authority did before – showing that Lyoness/Lyconet’s business practices are wrong (incorrect/irregular) and now prohibits its dissemination and continuation. Amongst others, investigations are currently still in progress in Poland.

Page 35 of the Italian decision: (Decision Italy 19.Dec. 2018)

DELIBERA (Decision)

a) che la pratica commerciale descritta al punto II del presente provvedimento, posta in essere dalle società Lyoness Italia S.r.l., nella qualità di professionista ai sensi dell’articolo 18, comma 1, lettera b), del Codice del Consumo, costituisce, per le ragioni e nei limiti esposti in motivazione, una pratica commerciale scorretta ai sensi degli articoli 20, 21 comma 1, lettere b) e c), e 22, nonché dell’articolo 23, comma 1, lettera p), del Codice del Consumo e ne vieta la diffusione o continuazione;
è the practices of Lyoness Italia S.r.l. infringe Article 20,21 (and so on). Their practises are therefore wrong (uncorrect/irregular).
è since their practices infringe Article 23 and prohibits their dissemination and continuation.

First, a fine of 3.2 Mio € was imposed, which could be seen as a warning shot. Significantly more serious are the findings of the investigations that are similar to Norway’s findings. This is no surprise since the structure and procedures of Lyoness are the same in all countries.

After the conclusion of a long inquiry, the competition authority (AGCM) stated that:

The promotion system for the purchase model “Cashback” Lyoness Italy S.r.l. uses, is incorrect, because it is a pyramid scheme/snowball system, which the Consumer Protection Act classifies as a definitely misleading business practice.

The system revolves around a fee-based discount card with which consumers can “save money” in certain stores. Only the leaders of the Lyoness system yielded high profit rates with the members’ “careers”.

The promotion system used the advantages of the Cashback system just as a pretext and in fact, banked on the recruitment of a high number of consumers as their sales representatives. “After they have ‘joined’, a very high ‘entry fee’ is requested for reaching the first commission level and the start of their ‘career’ as Lyconet Premium Marketers. After this, the marketer has to recruit other consumers and has to make further payments for their ‘career progress’”, said a spokesperson of the authority.

Within the inquiry, it was it has been found that the Cashback system in fact has a secondary position within the economic turnover of the Lyoness system, namely 16%. The remaining 84% are achieved by the sale of Lyconet products! So much for the so-called “purchasing association”. It is only possible to reach a high level of Shopping Points (the compensation mechanism of the payment plan) if the participating consumers or persons recruited by them make further payments. As it has been noted, several ten thousand consumers made these payments to become included and to stay in the system. Only a few people were effectively able to reach relevant positions.

“The regulation authority further noted that methods with which properties, conditions and time limits of the system were presented, are misleading. The different aspects have neither been explained at events nor on the websites. Also, some necessary indication on distance selling contracts, as for example information on the right of withdrawal, the place of jurisdiction and dealing with complaints are missing on the websites.”

Lyoness Italy now has two months left for submitting a new marketing plan that has to be approved by the AGCM. Several Italian Lyconet presidents asserted that they already have implemented all points criticised by the resolution and that they “have received an ‘OK’ from the AGCM”. After consultation with the AGCM, this assertation is incorrect. The AGCM did not receive anything or authorise anything like that. Right now, purchases can still be made with the Cashback card and SMEs can still be added. But anything concerning Premium, EST, Cloud, EC1 and EC2 (the main source of income) is prohibited. (We already know all this from Norway!)

Lyoness reacts with long known “crisis wording”, the criticised Lyconet business practices are not mentioned:

“Dear Lyconet Marketer,
In the context of the requests of the competition authority (AGCM) to Lyoness we would like to inform you, that we have heard the decision of the AGCM. We are more than surprise by this latest decision and will of course take all necessary legal measures.

We note that took suitable measures after the beginning of the AGCM inquiry in September 2018 and that we reacted to the authority’s objection immediately. We were therefore even more astounded about the latest decision, which is not plausible for us in any way, even if the changes of the system already made are being regarded. In the whole world, Lyoness is a company that meets the requirements as shown by the closing of proceedings in Austria.

Lyoness is an international purchasing association with 11 million members and more than 120,000 partner companies. In Italy, more than 1.5 million members are daily receiving benefits from more than 25,000 related companies that are feeding tens of millions of purchases back into the community of related companies every month.

As already mentioned, we will oppose this decision at the appropriate places. We can count on a team of competent lawyers and competent independents (super partes), who are supporting our view. We are confident that, like in Austria, we will reach a positive outcome. Therefore, our members will still receive benefits from their purchases and the loyalty program will still be provided to small and medium-sized enterprises.

Of course, we will keep you up-to-date.
With best regards, Lyoness Italia S.r.l.”…/lyoness-under-preliminary-investig…/

Here are some more examples:

'The judge Mathilde Beranek from the Commercial Court in Vienna, Legal Department 58.1 Vienna, convicted Lyoness as a snowball system and declared the company’s General T&Cs to be null and void (Case No. 581 Cg 44/16y-11).

The Austrian Supreme Court’s verdict of 18 May 2017 was already reconsidered during the first proceedings. Among other decisions, the Commercial Court in Vienna stated the following: Ultimately, the claim is legitimate notwithstanding the negation of the plaintiff’s status as a consumer. The clauses 13.2 and 13.3 of the General T&Cs, as well as the clauses 8.3 and 8.4 of the Supplementary T&Cs are null and void, separately, as well as in combination, because they limit the customer’s right to a refund of their “down payments/instalments” based on no factual grounds and on reasons which are largely at the discretion of the defendant. Thus, the cancellation conditions are deemed to be not only opaque according to § 6(3) KSchG (10 Ob 45/16i), but also grossly prejudicial.

Even if the point raised by Lyoness that the conditions refer solely to entrepreneurs was accurate, the General T&Cs would nevertheless be null and void due to the violation of § 879(3) ABGB. Source:'

Aug 01, 2017

The Supreme Court in Vienna has rejected the appeal On the 18th of May 2017, the Austrian Supreme Court in Vienna delivered a long overdue, 53-pages-long verdict (Verdict Supreme Court General T&Cs, Ref. no.

10 Ob 45/16i) regarding the General T&Cs of Lyoness and rejecting the appeal made by Lyoness.

The verdict, which had been stalled by Lyoness for a long time, sends out a strong signal. Apart from the fact that Lyoness has already been found guilty by a final judgement of being a snowball system, the court of final appeal has decided that all contracts/General T&Cs from 2007, 2009 and 2012 by and with Lyoness are null and void.



File number:

NSD 884 of 2014

Date of judgment:

23 October 2015

TRADE PRACTICES – pyramid selling – participation payments by “some or all” of the participants – recruitment payments – benefits “in relation to the introduction” of new participants

TRADE PRACTICES – referral selling – receive a benefit “in return for” the giving of names'

30. January 2018

In a 16-page decision, the Norwegian regulatory authority “Lotteri- og siftelsestilsynet” (publication by the Norwegian authority) has classified the companies Lyoness Norway AS and the “new variety” Lyconet as illegal pyramide schemes and snowball systems and has demanded that the companies cease all business activities within four weeks.

Should Lyoness Norway AS and Lyconet not comply with this request before the due date or not make a statement duly justifying their failure to comply, the companies might be closed ex officio and respective charges might be pressed.

The classification of Lyconet as an illegal pyramid scheme and snowball system coincides with the current proceedings involving Lyoness Europe AG. The parent company keeps claiming at public events and in the media that the company has “repositioned itself” and that “it has learned from its past mistakes”. However, Lyconet has already been classified as a snowball system by final court rulings in Switzerland. Judgement from the Canton of Zug (EV201642) of September 20, 2016. Quote: Lyconet is working with what they call “customer clouds”, meaning that payments are made which could be “multiplied” in the future through purchases in the respective countries. So, on the whole it is the same principle as the old Lyoness country packages and it is therefore a snowball system.

The Norwegian, German and Swiss authorities do not let themselves be fooled or deceived by Lyoness/Lyconet. Any interventions by the Lyoness General Counsel Dr. Reif and his “sorcerer’s apprentice” Mr. Zotter have ended at the Austrian border. The Austrian judiciary, which is clearly exhibiting “Nigerian patterns of behaviour”, should take the Norwegian objectivity as an example.

“No one should be surprised if Lyoness/Lyconet comments on the shut-down of the company in Norway that they had been planning a discontinuation of their business activities in Norway anyway.”

5th June 2018

'The Lottery Authority has concluded that Lyoness is an illegal pyramid-based conversion system.
published 4. June 2018

On March 31, 2018, the Lottery Authority has ruled that Lyoness must cease all operations, participation in and extension of work in Norway as the work is an illegal pyramid-trading system.
Must stop all illegal activities in Norway

The decision implies that all transfers and all payments from Norwegian participants and loyalty companies to Lyoness, Lyconet, Cashback World and myWorld must cease. Between another, all sales coupon coupons, share in customer shows, gift cards, promotional materials and seminars must be discontinued. The Lottery Authority has undoubtedly given a part of the decision the proposed implementation until the deadline for three weeks expires. Until the deadline expires, existing participants can use the benefit card of existing loyalty companies and receive a discount on the basis of this trade.

The decision is directed against myWorld Norway AS (former Lyoness Norway AS) and Lyoness Europe AG, but will also affect around 152 500 Norwegian participants and 1000 Norwegian loyalty companies included in the revenue system.

You can read the whole decision here . Lyoness has three weeks to complain about the decision.

The Lottery Authority asks participants who have questions about what the decision implies for them and what happens with the money they have paid to contact Lyoness.
Pyramidal sales system

In Norway, it is forbidden to create, drive, participate in or make known illegal pyramid games and pyramid-based sales systems.

The Lottery Authority has concluded that Lyoness is an illegal pyramid-based sales system. The conclusion is based on the following assessment:
The revenues of Lyoness in Norway are mainly due to the acquisition of participants, and no hall or consumption of goods, tenester or other benefits.
Participants in Lyoness who buy discount coupons, share in customer shows, gift certificates, promotional materials and seminars from Lyoness, do not receive any goods, tests or other benefits that correspond to the value of the paid. Purchasing is, in fact, a consideration for participation status.
Lyoness has not documented that the revenues of the company are particularly burdened by the sale or consumption of goods, services or other benefits, and not others being protected by the system, cf. Lotterilova§ 16, third paragraph.


Lyoness Suisse GmbH withdraws its appeal at the High Court of Appeal in Zug! The conviction as a “snowball system” is therefore final.

Journalists have treated Lyoness (now “Cashback World”) for a long time as a “pariah” and their latest press release has once again validated this deserved reputation. But have a look for yourself!
Press release from the 31st of May 2015
The way Lyoness expresses itself in its latest press release is of almost unsurpassable arrogance. Now, Lyoness wants to prove that their actions are legally sound by ignoring the judgement pronounced by an ordinary court. Their renaming as “Cashback World” doesn’t change a thing. The CEO Adolf Weisskopf is aware that some members have been waiting for almost 10 years for the company to function properly, but so far only the managers are making any money from it.
Regardless of any sugarcoating, the fact remains that Lyoness has been convicted as a “snowball system” by a final judgement. 

LYONESS have been fined for illegal advertising

The authorites declined to take matters further.


'Lyoness was running a pyramid scheme in violation of Sweden’s Lotteries Act was not under contention, rather prosecutor’s didn’t know who to file charges against...'
'The cooperation between the Austrian Golf Association and Lyoness no longer exists, as confirmed to us in writing by the Secretary General, Mr. Robert Fiegl.
In March 2015, Lyoness announced a long-lasting and groundbreaking partnership with the Austrian Golf Association and its 100,000 members. However, after only one year the long-lasting partnership had come to an end! It seems that the Austrian Golf Association soon noticed that there was nothing to be gained from a cooperation with Lyoness, nor were they a reliable partner. The Austrian Golf Associations cashback card (a membership card functioning also as a Lyoness cashback card) was terminated approximately 1 year ago.'


08.01.2018 | 14:03 |
The public prosecutor's office Cologne has initiated a preliminary investigation against the Lyoness Germany GmbH. It concerns the suspicion of a possible fraud and an offense against the law against the unfair competition (UWG), announced public prosecutor Rene Seppi of the APA on Monday.

The procedure concerns exclusively the Lyoness Germany GmbH, so the legal representative in a written opinion. "After receiving a large defense brief, the investigation is still ongoing."

The investigation had been initiated after examination of "the initial suspicion". Details did not mention Seppi.

In the summer of 2016, a Munich conflict-management bureau filed a comprehensive criminal complaint with the public prosecutor's office in Cologne. The scoreboards claim to represent several hundred Lyoness customers who feel harmed. Lyoness had always stressed that she had done nothing wrong.

Lyoness has several divisions. In addition to the well-known shopping community around the Lyoness card, the company operates a structure distribution called Lyconet. In this area, the company had legal problems in several countries, including Austria, because of complicated business conditions.

I've got a facebook page dedicated to Cashback World, so please pop over and like it, thanks:

Watch this space, I have many more cases to add and follow up.

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