Banks: Neutral in MLM structures, merciless towards victims – a system of turning a blind eye and arbitrariness

How credit institutions simultaneously facilitate a scam and dispossess innocent people

“Which is a greater crime, robbing a bank or founding one?”
Brecht’s famous question seems less provocative today than sobering. Because what is increasingly becoming apparent in the European banking sector is no longer an isolated incident, but a structural failure.

Banks are acting unlawfully in two ways:

– too passively where they should be acting,

– too aggressively where they should be refraining.

Both follow the same logic.

When banks keep a scam alive

Lyoness/Lyconet/ myWorld complex is not a fringe phenomenon, but one of the best-documented pyramid scheme cases in German-speaking countries.
For years, courts have repeatedly criticized key aspects of the business model, often classifying it as unethical and illegal. The number of legally binding judgments is substantial.

And yet, accounts remained open, payments continued, and participation and license fees continued to be processed.

According to the jurisprudence of the Federal Court of Justice, neutrality ends where there is established knowledge. Legally binding judgments no longer permit “ignorance.” Anyone who nevertheless continues to maintain accounts and thus provide the functionally necessary infrastructure is no longer acting neutrally.

Banks are failing here through inaction.

When banks become judge and executioner

While banks turn a blind eye to systemic fraud for years, they act with remarkable severity in other areas:
– Account closures without warning, – Transfer blocks without justification, – Terminations with blanket reference to “compliance” or “AML”.

Small businesses, freelancers, and inconspicuous payment recipients are frequently affected. Decisions are made internally, often AI-supported, without any discernible case-by-case review. The consequences are existential – and met with silence.

Banks reflexively invoke banking secrecy, internal risk models, or money laundering prevention.
But this argument falls short.

The European Court of Justice has clarified that
risk assessments, scoring, and classifications are personal data. The right of access under Article 15 GDPR also generally applies to them in the context of AML.

Banks are allowed to investigate, block, and terminate contracts.
However, they are not allowed to remain silent if their assessments damage their reputation and have economic consequences.

A blanket refusal to provide information violates European data protection law.

Selective neutrality

Both phenomena appear contradictory, but are two sides of the same coin:

Case

Court-established fraud

Inconspicuous customer

Banking behavior

“We are neutral”

“Complaince – no information”

Neutrality is claimed where liability is threatened. Power is exercised where those affected have little resistance.

Banks as private sovereign entities

In effect, banks perform tasks with quasi-sovereign power:
– they decide on solvency, – deprive market participants of their economic basis, – classify individuals and companies as “risky”.

Unlike public authorities, however, they are not subject to any obligation to inspect files or to provide effective justification. This creates a legal vacuum in which private actors exercise power without corresponding constraints.

Conclusion: A dangerous imbalance

As long as banks
hide behind neutrality where judgments exist, and entrench themselves behind compliance where transparency obligations apply,

Risk management degenerates into a power technique.

The crucial question is no longer whether this system is illegal, but why regulators, politicians and the judiciary allow private institutions to effectively exercise more power than state bodies – without fulfilling their obligations.

This is not a business problem. This is a democratic one.

Note:
This article is a journalistic analysis. It separates facts, legal standards, and opinion. It does not constitute legal advice for any specific case. Protection is afforded by Article 5 of the German Basic Law (GG) / Article 10 of the European Convention on Human Rights (ECHR). Rebuttals are expressly welcome.

Sources:

Federal Court of Justice (BGH) case law on
liability and neutrality limits of payment service providers in cases of confirmed knowledge of unlawful business models
(e.g., BGH, III ZR 299/08; III ZR 296/15)
Court rulings regarding Lyoness / myWorld:
Several legally binding judgments in Germany and Austria with objections due to immorality and misleading advertising.
ECJ – Right of access & scoring:
Risk assessments and profiling are personal data within the meaning of Art. 15 GDPR
(ECJ, C-634/21 – SCHUFA)
General Data Protection Regulation (GDPR)
Articles 4, 15 and 22 GDPR – Rights of access and automated decision-making
EBA/FATF Guidelines:
Risk-based approach to money laundering prevention, obligations of credit institutions
Fundamental and media rights
Art. 5 GG, Art. 10 ECHR – Protection of journalistic analysis and freedom of expression