Okay, I like being a business and community connector. Its fun and fulfilling to help people. One of the results is that every multi-level marketer and scam pyramid scheme is offered to me because I have a large rolodex. (Under age 40 or so, Google rolodex if you want to know what that means). I am posting in full my response to one such solicitation since this person is not on my Facebook. I protect people from scams, victimization and other, shall we say, bull. Yet, they keep coming to me like Im going to promote this nonsense. --------------------------- Thank you, I looked into this a little while back when a client asked me to check out this as a possible income source. Through my own research, I pretty much have come to the same conclusions about Lyoness, et al as are stated in the Controversy and Legality sections of this Wikipedia page. (see after my signature) I know that you are into multi-level marketing but I need to ask you to refrain from offering this product on any our Vibrant Asheville Business platforms or at any of our networking meetings. I believe you have a ------- business as well which is welcome. All the best, Alan Controversy One year after Lyoness was founded, in 2004, the Austrian criminal police (Kriminalpolizei) published an article[23] in the December issue of its organisation’s magazine, in which it warned for the resurfacing of Ponzi schemes and pyramid schemes in Austria. Lyoness was explicitly mentioned in this article. Lyoness contested the allegations publicly.[24] In 2005, Austrian Parliament member, Johann Maier (SPÖ) asked the then-incumbent Austrian Minister of Justice (Karin Miklautsch, BZÖ) parliamentary questions about the reports filed against alleged pyramid schemes in Austria in 2004.[25] Lyoness was one of the organisations complaints were filed against.[25] In 2008, the Austrian Chamber of Labour (‘Arbeiterkammer’) of Steiermark issued a warning against Lyoness, listing its alleged privacy violations, misleading advertising, deceptive information and unrealistic and negligible benefits as red flags for doing business with Lyoness.[26] In March 2010, the Swiss medium Beobachter published an article[27] by Pascale Hofmeier entitled ‘ Lyoness: Hands off’. In the article, Sara Stalder of the Swiss Consumer Union and Manuel Richard of the Swiss Gambling Commission warn consumers not to do business with Lyoness. In the beginning of 2012, Kleine Zeitung published an article[28] suggesting that Lyoness has deceived the masses by operating an irrelevant shopping community, whereas actually, it is all about the systems behind this community. L’Hebdo, a Swiss medium, reproduced a story about how Lyoness members are told that an investment of 3,000 CHF will eventually lead to 25,000 CHF in return, if enough new, down-paying members are recruited.[29] In February 2012, the Beobachter published an article[30] stating that, based on consideration of internal Lyoness communication, members are offered ‘bounties’ up to 45,000 CHF to provide ‘relevant information’ on Lyoness’ critics. A critic from Zurich was reported to have been sued for over 1 million CHF for ‘defamation’ after he contacted Lyoness’ partner companies in Switzerland in an attempt to explain the business model of Lyoness to them. The article also reported that the Lyoness business model seems to revolve around recruiting activities instead of discounts and that Lyoness is internationally charged with forgery, fraud and hosting a pyramid scheme. Der Standard reported in July 2012 that the Austrian Economic and Corruption Prosecutor (‘WKStA’) has been granted jurisdiction to investigate and prosecute Lyoness in Austria.[31] Additionally, criminal charges are pending in Switzerland. The Swiss Handelszeitung mentioned a court case Lyoness lost, which revolved around the question as to whether Lyoness should have issued a financial prospectus before asking investors to finance their foreign-markets advertising campaigns.[32] In September 2012, the same newspaper reported[33] that major, alleged Lyoness partners in Switzerland (Microsoft and Kuoni Travel) were announcing not to continue the partnerships, if there were any to begin with. The Wiener Zeitung reported[34] about a pending lawsuit initiated by the Austrian Consumer Organisation ‘VKI’ in March 2013. The VKI contests 61 clauses of Lyoness’ ‘General Terms and Conditions’, which it called opaque, uncertain, and/or meaningless.[34][35][36] Eric Breiteneder, hired as a legal representative by the organisation, also referred to the concepts used to distinguish various parts of – and benefits within the Lyoness business model as vague and/or undefined elsewhere.[37][38] The Handelszeitung reported about suspicions that high-level Lyoness members were earlier involved in (other) pyramid schemes, like the ‘Spirit of Independence’.[39] It also mentioned a system called ‘GTS’ (Global Trade System), operated by Erin Trade SA, as a former organisation tied to Hubert Freidl.[39] Like Lyoness, this company has been called a pyramid scheme in the public debate.[39] The Kleine Zeitung reported that various experts were looking at the investment schemes for advertising campaigns organised by Lyoness, and whether a prospectus was required before attracting capital from investors.[35] Lyoness-hired[40] professor Susanne Kalls concluded that no capital market regulations were violated by not issuing a prospectus; attorney Karl Hengstberger came to the opposite conclusion.[35] In the same article, Mathias Vorbach, spokesman of Lyoness, admits that Lyoness may have had some trouble before, but that those days are behind us – Lyoness has learned from its mistakes.[35] He asserts the message that legal problems have only appeared in Austria (a contested claim) and that 95% of the Lyoness members just shop and do not participate in the earning models offered by Lyoness.[35] However, the Beobachter, after reportedly considering internal Lyoness documents, published an article[41] suggesting that 99.7% of the Lyoness turnover derives from down-payments on future purchases, not from actual shopping or (saved up) discounts. Lyoness contests that it operates a pyramid scheme, as well as that it violated the relevant capital markets regulations when offering investments without issuing a prospectus.[42] Legality In the meantime, both Austrian and Swiss authorities have started investigations of the Lyoness business model and the related allegations that the company is running an illegal pyramid scheme.[31] Reportedly, similar investigations were started in Hungary[43] and Australia. Also, it was reported that the Austrian Consumers Union has filed suit against Lyoness for providing participants with unclear and deceptive terms and conditions.[34] According to the website of his law firm, VKI-attorney Breiteneder is currently the attorney of about 300 former Lyoness participants who are demanding their money back from Lyoness.[44] Reportedly, he has managed to get his clients’ money back on several occasions.[44] These clients had invested money in the advertising campaigns organised by Lyoness, and several option trading packages offered by Lyoness, but were not provided with a prospectus.[44] The Viennese Commercial Court has on several occasions ruled that this violates the Austrian legislation on investments and has granted the plaintiffs the right to demand their money back.[45]
Posted on: Thu, 24 Oct 2013 02:16:38 +0000
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