Publication of the Authority dated 13.03.2019 (Norwegische Behörde 13.03.2019) in translation:
Lyoness – Request for a written confirmation that the infringement against the Ponzi scheme regulations of the lottery law has been remedied, cf. § 16 (4) of the lottery law
The supervisory authority for lotteries refers to the lottery committee’s resolution of 27 January 2019 in which the claim of Lyoness Europe AG and Lyoness Norway AS regarding the lottery committee’s resolution of 31 May 2018 was rejected. Further we are referring to the lottery office’s decision of 28 February 2019 not to suspend the resolution.
The lottery committee concluded that Lyoness is a trading system which is a Ponzi scheme according to § 16 (2) and has sustained the lottery supervisory authority’s resolution. The lottery committee has found no reason for giving Lyoness Europe AG and Lyoness Norway AS the possibility to remedy unlawful circumstances. The resolution has the consequence that Lyoness Europe AG and Lyoness Norway AS must stop the complete business, the participation and distribution of products of the company in Norway.
The supervisory authority for lotteries’ resolution of 31 May 2018 shows that the resolution for a suspend of Lyoness’ operations includes that all purchases and payments of Norwegian participants and Cashback-companies of Lyoness, Lyconet and Cashback World must be stopped. Further, the marketing of the enterprise, the use of bonus cards and the sale of discount vouchers, shares in customer clouds, gift cards, marketing material, seminars and the like must be stopped. Also, Lyoness is encouraged to stop any payment of discounts, bonuses and provisions to the Norwegian participants.
The supervisory authority for lotteries demands a prompt written confirmation from Lyoness Europe AG and Lyoness Norway AS for the remedy of the infringement of § 16 of the lottery law, cf. lottery law § 16 (4).
We refer to the resolution of 31 May 2018 and want to point out that the resolution of the stop of Lyoness’ business in Norway does not keep Lyoness Europe AG and Lyoness Norway AS from paying back the amounts, participants paid for the purchase of discount vouchers and shares in customer clouds before the day of the resolution and that were not paid back in the form of redeemed discount vouchers. Furthermore, Lyoness is not prevented from paying back the amounts participants have paid for marketing material and seminars before the day of the resolution. Also, Lyoness is entitled to pay out the amounts participants have compiled by purchasing from Cashback companies until the day of the resolution.
The lottery supervisory authority points out, that we are going to evaluate this issue precisely. An infringement of § 16 is to be seen as a gross infringement of the lottery law and can be avenged with penalties or prison sentences of up to three years, cf. § 17 (2) of the lottery law. Such a punishment can be inflicted on companies and persons that are founding, operating, participating or distributing a Ponzi scheme, cf. § 17 and § 16.
According to the resolution of 27 January 2019
Section 1 of the lottery law. Illegal Ponzi schemes are exposing consumers to a financial risk and further detrimental effects that have to be prevented, cf. preparatory work for Ponzi scheme regulations in the lottery law Ot.prp. Nr. 97 (2004-2005) Section 1.
The supervisory authority for lotteries urges Lyoness Europe AG and Lyoness Norway AS to in form marketing managers and Cashback companies quickest possible about the resolution and the consequences they will have to face if the business, the participation and the distribution of the illegal Ponzi scheme will not be stopped immediately.
If the supervisory authority should become aware that the company is violating the resolution we will consider a sanction of Lyoness Europe AG and Lyoness Norway AS according to § 14 c of the lottery law. The supervisory authority for lotteries will also consider filing a complaint against Lyoness Europe AG, Lyoness Norway AS, the marketing managers and other business partners of Lyoness that continue the unlawful operations.
In case of a possible trial the supervisory authority for lotteries will bring in further information and evidence concerning the case.