Lyoness is 'buying' (but with your money)

Once upon a time, way before the extensive media coverage and the investigations started, everyone believed that Lyoness was able to spend a fortune on a variety of things, all because of the one percent they received on all purchases made with their cashback card.

Not only did Lyoness promise to multiply all of their participants' investments by nine (!), it also signed a three-year sponsor contract with the organisation behind the Austrian Open golf tournament (pdf) for a prize total of at least one million euros, it hosts extravagant and decadent events all across the globe and once in a while, just for fun, it invites people to go on a treasure hunt. With monthly prizes ranging from hundreds of thousands, to millions of euros.

However, when one considers Gerhard Huber's claim that Lyoness has an annual turnover of more than a billion euro, this should not be to hard to comprehend. If the entire Lyoness turnover were to consist of nothing more than the sum of all 1% discounts that Lyoness receives on purchases made by their members, in the shops of those same exact members should amount to one hundred times one billion. This would mean that the approximated 2.7 million Lyoness members would have had to spend one hundred billion euros per year, only on products that can be bought at Lyoness partners (you'd better like LIDL). Yes, that is: euros

Per year. Per member, this would amount to a little more than 370.000 euros per year.

Lyoness adherents reading this blog may argue that I have no way to prove that this did not happen. Perhaps not, but I've got a hunch.

Additionally, the Swiss medium Beobachter and ORF Report, who's journalists had a look in vital parts of the Lyoness administration, have come to the conclusion that 99.67% of the Lyoness turnover has nothing to do with the one percent (until recently always mentioned as the only source of Lyoness' revenue) they receive on every purchase made by Lyoness members; no, these estimated 990.670.000 euros come from the advance payments on future discounts, i.e. the position system, i.e. the pyramid scheme.

As American readers of this blog may know, the Federal Trade Commission utilises a rule of thumb (pdf) that if a 'company' sells less than 70% of its products or services to consumers outside of their organisation, it is an illegal pyramid scheme, which will consequentially be shut down by the FTC. Lyoness does not sell anything and 99.67% of their turnover comes from inside the organisation, the down payments of enrolled participants.

Unfortunately, for those of you who like fairy tales, this dream got crushed like a small ice cube by a meteor. The only reason Lyoness signed a three-year contract with the Austrian Open was to try to restore the faith of their believers - i.e. that they would still exist in three years. I sincerely doubt it. The only reason Lyoness organises treasure hunts with incredible prizes, is to try to create some goodwill and to lure some more people into the scam. Goodwill is also one of the reasons that Lyoness is 'investing' in a 'sustainable and fair world' through its charity foundations. It has been suggested that another reason for that is to obstruct justice and to be able to easily move illegally made money from country to country.

In other words, you (as a Lyoness victim) paid for Freidl meeting Nelson Mandela. You also paid for his 'birthday trip' to the Maldives. I can imagine that the victims of Lyoness are pretty frustrated that Freidl is such a big spender - with the money he took from you. Everything Lyoness has paid, you paid. And odds are, you will not see this money back. I wonder whether Freidl got cash back with every purchase.

1 comment:

  1. It is interesting to note, that in order to avoid closure in the 1970s for running a pyramid fraud (comprising a fake 'direct selling scheme' with virtually no authentic retail sales to the general public and, therefore, no significant or sustainable external revenue), the Amway' racketeers suddenly produced a '70% sales rule' which, to casual observers, appeared to comply with FTC rules.

    In reality, the short-sighted dim-wits at the FTC completely failed to spot this 'Amway 70% sales rule' was itself a fake within a fake, cleverly written in such a vague way that it could be taken to mean 'sales' to the 'Amway' participants themselves.

    Subsequently, virtually all other gangs of 'MLM income opportunity' racketeers have copied the essentially-meaningless 'Amway 70% sales rule' in order to dodge prosecution in the USA and to continue to commit fraud.

    In other words, because these fake 'sales rules' have been used to obstruct justice, they have clearly formed part of an overall pattern of ongoing, major, racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970)

    Of course, the fact that the 'Lyoness' racketeers have 'sponsored' the Austrian Golf Open, means that the European Golf Tour has actually been in receipt of a large sum of stolen money.

    Furthermore, seeing as I have taken the trouble to inform officials at the European Golf Tour HQ in England, of what they have become involved in (albeit, in ignorance of reality), the subsequent silence of these officials on the subject of 'Lyoness,' now makes them accessories after the fact to ongoing, major racketeering activity.

    David Brear (Copyright 2013)