Norway: Lyoness-Shopping network continues to operate despite an official ban!

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Norway’s oldest daily newspaper “Adresseavisen” regularly deals with the ban on Lyoness in Norway. The Norwegian authorities are not deceived by Lyoness and its subsidiaries. Good to know. An article from 15 October 2019: (Translated from Norwegian)

Although Lyoness has been forbidden to continue its entire business in Norway, the marketing of the associated shopping networks Myworld and Cashback World continues.


Indications: The Norwegian gambling supervisory authority Lotteritilsynet has received several inquiries in the last few months regarding the activities of the network company Lyoness in Norway. PHOTO: MARIANNE TØNSET

Cashback World and Myworld’s Norwegian websites attract visitors with benefits they will get if they register, and both networks also have their own Facebook pages, which are frequently updated with new offers.

At the same time, Lotteritilsynet, the authority that has given Lyoness the regulatory order to discontinue its entire operations in Norway including advertising and deposits to i. a. Cashback World and Myworld last year, continues to receive clues.

The decision was approved in January this year by the Norwegian Office for Gambling (Lotterinemnda), which found that Lyoness’ business in Norway constitutes an “unlawful, pyramid-shaped revenue system”, whose proceeds mainly derive from recruiting new participants.

Lyoness was also not given the opportunity to remedy the unlawful aspects, but was charged with immediately terminating the activity.

Written confirmation required

In March this year, Lotteritilsynet requested written confirmation that the business was no longer operated. At the same time, they warned Lyoness that they were considering filing with the police against Lyoness, the marketers and other cooperation partners if it continues to violate regulations.

However, the list of indications received by Lotteritilsynet shows that a number of clues have been received during the summer and autumn about Lyoness still being active in Norway. Adresseavisen had no opportunity to see the evidence, as it was about “possible violations of the law” sent by private individuals, both out of respect for the whistle-blowers and those concerning the clues.

Silje Sægrov Amble, senior consultant at Lotteritilsynet, says that from July 1 to October 7, she received about 30 references to Lyoness and additional telephone inquiries and written inquiries.

Amble says that, as a result of the case, she does not want to answer specific questions about Lyoness’ business in Norway and how it works. At the same time, she sent the answer Lotteritilsynet has sent to the people who have asked questions about the status of the case.

There Lotteritilsynet announces among others:

“Lotteritilsynet has recently received many new indications that Lyoness has become active again in Norway and that former participants have been asked to continue working for another company. Out of consideration for the further processing of the case, we cannot give any further information about how we evaluate the relevant information and whether the case is examined by us. “


The end for Lyoness: Silje Sægrov Amble, Senior Advisor to Lotteritilsynet, points out that both Lotteritilsynet and the Office for Gambling found that the ban under the Norwegian Gambling Act relates to the entire business activity of Lyoness in Norway. PHOTO: DAGRUN REIAKVAM / LOTTERITILSYNET

New society behind it

The decisions of Lotteritilsynet and the Gambling Office were directed against the companies Lyoness Norway AS and Lyoness Europe AG, which operated the Cashback World or Lyconet benefit system, which were responsible for marketing the benefit system and attracting new participants.

Meanwhile, a relatively new company – Myworld Nordic AS – is behind the Norwegian websites of Cashback World and Myworld.com. The company, which has been operating since April last year, is controlled by the Austrian Hubert Freidl, who founded Lyoness in 2003, through companies registered in London.

The annual accounts show that in the course of 2018 a revenue of over NOK 15 million was recorded. The financial statements also show that Lyoness Norway AS and Lyoness Europe AG are affiliated companies and that Myworld Nordic has purchased gift cards and coupons from the former company in the amount of NOK 1.8 million.

When Lotteritilsynet was informed about the formation of this company last year, Lotteritilsynet quickly announced that the ban on establishing, operating and participating in pyramid-shaped revenue systems also applies to Myworld Nordic AS.

Change of the company name

Adresseavisen has asked Amble from Lotteritilsynet whether the operation of this website is compatible with the prohibition of Lyoness to continue its entire business in Norway.

She replies that she does not want to comment on concrete issues out of consideration for the current case, but sherefers to the conclusion of the Office of Gambling that Lyoness’ entire business has represented a turnover system and that Cashback World and Lyconet were part of this system.

“The Office concluded that the prohibition referring to paragraph 16 (2) of the Norwegian Gambling Act refers to the whole business activity of Lyoness as an unlawful pyramid-shaped turnover system,” Amble said in an e-mail, adding a new reply:

“Lyoness has changed the company name and structure several times for this reason.”

Lyoness rejected by request

Lyoness Norway AS and Lyoness Europe AG are represented by the law firm Schjødt, which has tried to suspend implementation of the official decision until it has been judicially reviewed.

First, the application for suspension of operation of the order was rejected by the Office and then it was subsequently rejected by the District Court of Oslo.

Lawyer Olav Kolstad from Schjødt has stated in an e-mail that both companies “have of course respected Lotteritilsynet’s decision and have temporarily ceased trading in Norway”. He further writes that the next step is to have the case cleared up by the court.

Kolstad writes that he cannot answer on behalf of the affiliated company Myworld Nordic AS, from which the Norwegian websites are operated now.

Marit Johannessen, Head of Finance at Myworld Nordic AS in Lysaker in Bærum, refers to the company’s office in Graz, Austria, which had not responded by Tuesday morning.

Lyoness tries to limit the damage at the expense of the members!

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Currently, myWorld/Lyoness is approaching the injured parties that we announced at the public prosecutor’s office of Cologne. They are offering them, amongst others, a repayment of 50% of the claim amount in conjunction with an agreement that might verge on immorality. Legal practitioners agree that “no one in their right mind should sign such an agreement.”

Some German lawyers believe that they are helping their clients by making “deals” with Lyoness, accepting a repayment of 50% of the claim sum from which they further deduct honoraria and they are still expecting a thank you.

Solely due to our efforts, it came to a reaction of the convicted snowball system Lyoness in Germany. Without our activities all German victims would be trapped in the “legal bubble” and no “settlement payments” would be possible.

Regarding the current criminal investigations of the public prosecutor’s office of Cologne (Az. 115 Js 424/19), Lyoness is trying to limit the damage by giving injured members short shrift at lowest possible costs.

The injured parties are running the risk of being exposed to a claim for damages in the amount of at least 20,000 euros lodged by myWorld/Lyoness.

Among other things, the offered agreement says:

“The person transferring undertakes to hold the contents of this agreement in strict confidence, whereby this obligation of secrecy is valid without a time limit. The person transferring further undertakes to pay compensation in the case of an infringement of these contractual provisions. The amount of the compensation payment – regardless of the damages actually incurred – is set to a contractual penalty of 20,000 euros (in words: twenty thousand euros), whereby the transferee expressly reserves the right to further claim for damages above this amount. The person transferring expressly accepts the appropriateness of this contractual penalty.”

Swiss newspaper article with interesting and well-founded justification concerning a fresh judgement!

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It is not the judgement itself that the article focuses on, but the findings and all the concluded proceedings against Lyoness and its successor companies that are increasingly being mentioned in the international media.

Lyoness has always reinvented itself, whether by changing the company names or through numerous company mergers. Also, at renaming its financial products, Lyoness was not lacking creativity.

Lyconet Marketers present the snowball system Lyoness to unsuspecting prospective customers as a presumed transparent and plausible system, but as soon as they invest in it – may it be as a “sponsor” or under another melodious name – there is only one winner left.

The most accurate statement concerning the snowball system Lyoness is noted in the judgement of 4 June 2019: “The final economical effect is always that the lion’s share of the money that was paid in remains with Lyoness and can be posted as income.”

It is no surprise that also in this case, Lyoness brought the case to the Court of Third Instance. So far, they have not won a case. They are playing for time but at the latest when Lyoness/Lyconet is being asked to prove that it is not a snowball system the Lyoness crisis management has to pass. It is a snowball system and has already been judged as such.

Hereinafter the Swiss newspaper article:

  • https://www.tagblatt.ch/ostschweiz/werdenberg/lyoness-geld-zuruckzahlen-ld.1157494

(Translation of the press article)

Lyoness based in Buchs has to pay back 13,200 Francs

The County Court of Werdenberg-Sarganserland supports a plaintiff at first instance.

The two holding companies Lyoness Europe AG and Lyoness International AG based in Bahnhofstraße 22, Buchs have internationally been in the headlines for years. They are the holding companies for numerous national companies of the Lyoness group – according to themselves the world’s largest shopping community and active in 47 countries.

Hunting for discounts for purchases at partner companies

For the first time the County Court of Werdenberg-Sarganserland supported a complaint against the subsidiary company Lyoness Suisse GmbH, also based in Buchs. According to the judgement, Lyoness Suisse GmbH has to refund the “vouchers for future purchases” that an owner of a solar technology company had bought for 13,200 Francs. As well as the Canton Court of Zug on 28 February 2017 already did, the County Court concluded that Lyoness is operating an illegal snowball system.

For your understanding: For purchases from partner companies, discounts are credited to the Lyoness customers’ accounts – similar to the Coop Card or the Cumulus Card. Whoever further recruits new customers will also receive discounts for their purchases as well as for purchases of customers that are further recruited by them and so on.

System is not transparent

But not very much can be earned since there is a lack of large partner companies that accept the discount card. Therefore, it is tempting to by “partnerships” or “packages” in order to reach a higher level of the remuneration pyramid. The minimum investment lies at around 3,000 Francs and is open ended. Even for mathematical experts the remuneration system is not transparent, and the promised high earnings cannot be realised. Therefore, the business model was and still is a subject of many legal proceedings in several countries, as the W&O already reported multiple times.

“The money that is paid in stays with the company”

The decision of the County Court of Werdenberg-Sarganserland is one of numerous judgements against the two holding companies Lyoness Europe AG and Lyoness International AG that have been pronounced in the last years. Because by now, the business model has been classified as a snowball system in Austria, Italy, Norway and Switzerland with legally binding judgements. This year in Italy, Lyoness was sentenced to pay a charge of 3.2 million Euro. These decisions now make it possible for many injured parties to claim back their payments. In numerous cases in Austria and Switzerland, Lyoness has been sentenced to refund these purchasing sums, advance payments or “vouchers for future purchases” (Lyoness is known for inventing new names for always the same product). And further complaints are being proceeded. Nor does it change anything that the “discount dealer” has changed the name of the discount card to Cashback Lyconet and later on to Cashback MyWorld.

There are several individual justifications of the County Court of Werdenberg-Sarganserland that are very revealing. With the decision of 4 June 2019, it states: “The final economical effect is always that the lion’s share of the money that was paid in remains with Lyoness and can be posted as income”. It was typical for these financial products that they are “neither completely nor partly paid back in cash”. The mVouchers, so the current name of the “vouchers for future purchases” must not be sold but have to be given away and only to the customers of a Lyconet Marketer.

Additionally, in the case of a determination of the participation in the “Cashback World Programme” (this is another new name for the discount card system), mVouchers become invalid without any compensation, the Viennese Ben Ecker notes. The journalist has specialised in opaque business models. Amongst others, he has been critically monitoring the machinations of the Lyoness empire for years and has been spreading his findings on the internet. In the meanwhile, Lyoness/MyWorld had more and more transferred its recruiting activities to social media like Instagram. Thereby they were focusing on young adults of which some get hopelessly in debt in order to “buy in”, Ben Ecker writes on his website www.benecker.com.

Changing places at the top

The business model also includes that the people at the top of the holding companies change places from time to time. According to the Swiss Commercial Gazette, recently the British Cristopher Thomas is the new Chairman of Lyoness Europe AG and its sister company Lyoness International AG. This year, Lyoness moved its non-profit companies Lyoness Child and Family Found and Lyoness Greenfinity Foundation from Buchs to Graz where Lyoness has been having its operative headquarters since its establishment in 2003. Critics consider these foundations and their unclear cash flows a questionable image instrument.