There’s no end to the IPO fantasies! Annual General Meeting on January 18th, 2024, at 6 p.m. at the Helmut List Hall in Graz.  

After the IPO was announced, carried out, revised, relativized and finally supposedly never took place in the sense that it was supposed to, something is about to happen again: An IPO, you guessed it. Without ever having responded to any demand from marketers or investors, myWorld International AG is acting in its usual manner as if nothing had ever happened and is already selling another IPO. And once again Hubert Freidl is scattering crumbs to attract new members…….…but since these are only restricted B shares anyway, the holders have no voting rights and can save themselves this show!  

An Annual General Meeting of the shareholders of myWorld International AG will take place on January 18th, 2024, in the Helmut List Hall in Graz. With so many shareholders, the location is rather modest in terms of seating, especially as the atmosphere is unlikely to be positive. Shares that are virtually worthless, no admission to an official stock exchange, fictitious share values, non-reliable share values and so on.  

Marketers were informed in November in internal WhatsApp groups that they had to take care of their shares before the end of the year if there had been any problems with the KYC process or anything else. If you have not done so by December 31st, 2023, you will be left empty-handed. For all those who have registered before then, the tickets should be processed by the end of January 2024.  

With this, myWorld considers the work to be done and completes its phase 1 “share allocation”. Phase 2 will then begin immediately, in which an internal secondary market is to be opened on which the shares can be traded among themselves, internally. The price for this has not yet been fixed. It should be possible to sell the shares “without any problems”; this phase should be completed in the first half of 2024. 

Phase 3, the so-called “IPO preparation”, will then take place. Not much more is said about this, except that a meeting of the Level 8 members will be held in May or July 2024. Founder Hubert Freidl himself will discuss an IPO plan with his presidents.  

We can only hope that the so-called shareholders will ask the right questions, but there will probably be nothing more than slogans and promises.  

We will of course report on the Annual General Meeting and are very much looking forward to the new statements and promises. 

Vienna Supreme Court confirms VKI ruling from November 23rd, 2023 / 47 clauses of the Lyconet T&Cs unlawful! Good news for cloud owners!  

Once again, the GTCs of Hubert Freidl’s company have been declared null and void. The Lyoness T&Cs with 61 defective clauses were already ruled inadmissible in 2015. At the time, the company argued that these were old T&Cs and that the new T&Cs had been corrected and were unproblematic. However, this is not the case; now only 47 of the 61 clauses are illegal. A dubious improvement, but a good development for all cloud owners!  

The Association for Consumer Information (VKI) has brought a representative action against Lyconet Austria GmbH (Lyconet) on behalf of the Ministry of Social Affairs. Lyconet, a company active in network marketing, sold the “Cashback World Program”, among other things. This is a purchasing community that enables members to receive benefits by purchasing goods and services from partner companies. The subject of the lawsuit were 47 contractual clauses that were part of Lyconet agreements and so-called Lyconet compensation plans.  

These were criticized by the VKI due to numerous non-transparent regulations and the associated ambiguities, among other things. After the lower instances had already judged all 47 clauses to be unlawful, the Supreme Court (OGH) also recognized all clauses as unlawful. The judgement is final.  

The collective action brought by the VKI was directed against clauses from the Lyconet agreements (3-2019, 9-2019 and 1-2021) and clauses from the Lyconet compensation plans (3-2019, 9-2019 and 1-2021).  

A large number of the contested clauses were found to be non-transparent by the courts. For example, terms such as “Bonus Units”, “Customer Units”, “Subsequent Units”, “Transfer Units”, “Lifeline”, “Upline”, “Balance Program”, “Career Program”, “Balance Category” and “Balance Commission” were used, but their specific meaning remained unclear. The court of first instance already stated that these are not terms in common use and that they are incomprehensible in and of themselves without further context. They are also not sufficiently clearly explained in the entire Lyconet rulebook. The Court of Appeal added that even after intensive study of the entire set of rules, it remains completely unclear to the average consumer when and to what extent they acquire claims to which remuneration. 

The Supreme Court has now confirmed this view. Apart from the lack of transparency, some clauses were also found to be grossly disadvantageous to consumers. For example, the far-reaching options for cancelling the “marketer agreements” by Lyconet and excessive confidentiality obligations are abusive and therefore unlawful.  

According to the legal opinion of the VKI, the legally binding decision now available means that the Lyconet contracts in question are invalid and consumers can therefore reclaim the payments they have made in full.  

Hubert Freidl has always constructed his business model in such a way that all members are declared as entrepreneurs according to the general terms and conditions. The intention behind this is to deprive consumers of consumer protection and thus prevent them from reclaiming their payments, thereby unlawfully enriching themselves.  

In its judgement of February 22nd, 2023, GZ 11 Cg 55/22h-11, the Vienna Court of Appeal upheld the claim in full.  

Despite the clear legal situation, Lyconet Austria GmbH lodged an appeal, which was rejected by the Vienna Higher Regional Court on July 17th,2023, GZ 1 R 50/23i-18.  

Lyconet Austria GmbH nevertheless appealed to the Supreme Court, which rejected the appeal in its decision of November 21st, 2023, AZ 2 Ob 182/23p. According to the VKI, Lyconet Austria GmbH did not even pay the costs. 

Summary:  

Lyconet concludes contracts via a website it operates by means of registration and uses contract forms with a large number of standardized contract clauses.  

The overwhelming majority of people who enter into such a contractual relationship with Lyconet have never previously been involved in business activities, received income exclusively from employment and pursued private investment purposes. Lyconet does not reject contractual relationships with such people.  

Based on Section 28 KSchG in conjunction with Section 879 (3) ABGB, Sections 6 and 10 (3) KSchG, the VKI requests that Lyconet be prohibited from using or referring to clauses described in more detail or clauses with similar meaning in its business dealings with consumers in general terms and conditions or contract forms used by it. The VKI also insists on publishing the judgement in the daily newspaper.  

This proves that the vast majority of customers are consumers, but that the general terms and conditions imply that they are entrepreneurs in order to take advantage of them. 

Special on Freidl’s real estate project “Chicago Lane”: What marketers found out themselves and the current status!

Source Images: Riegler & Partner ; BE Conflict Management

The verdict by the Austrian Supreme Court concerning the Lyoness General T&Cs was already reaffirmed during the first proceedings!

The judge Mathilde Beranek from the Commercial Court in Vienna, Legal Department 58.1 Vienna, convicted Lyoness as a snowball system and declared the company’s General T&Cs to be null and void (Case No. 581 Cg 44/16y-11).

The Austrian Supreme Court’s verdict of 18 May 2017 was already reconsidered during the first proceedings.

Among other decisions, the Commercial Court in Vienna stated the following:

Ultimately, the claim is legitimate notwithstanding the negation of the plaintiff’s status as a consumer. The clauses 13.2 and 13.3 of the General T&Cs, as well as the clauses 8.3 and 8.4 of the Supplementary T&Cs are null and void, separately, as well as in combination, because they limit the customer’s right to a refund of their “down payments/instalments” based on no factual grounds and on reasons which are largely at the discretion of the defendant. Thus, the cancellation conditions are deemed to be not only opaque according to § 6(3) KSchG (10 Ob 45/16i), but also grossly prejudicial.

Even if the point raised by Lyoness that the conditions refer solely to entrepreneurs was accurate, the General T&Cs would nevertheless be null and void due to the violation of § 879(3) ABGB.

 

 

Lyoness – Cashback World / In the market without valid General T&Cs?

The Lyoness General T&Cs from the past have been declared null and void by a court ruling, but also the company’s current General T&Cs have been classified as being immoral. Read more

Lyoness is no longer a partner of the Austrian Golf Association!

The cooperation between the Austrian Golf Association and Lyoness no longer exists, as confirmed to us in writing by the Secretary General, Mr. Robert Fiegl.

In March 2015, Lyoness announced a long-lasting and groundbreaking partnership with the Austrian Golf Association and its 100,000 members. However, after only one year the “long-lasting” partnership had come to an end! It seems that the Austrian Golf Association soon noticed that there was nothing to be gained from a cooperation with Lyoness, nor were they a reliable partner. The Austrian Golf Association’s cashback card (a membership card functioning also as a Lyoness cashback card) was terminated approximately 1 year ago. Based on experience, it is questionable if the 100,000 members of the Austrian Golf Association have been deducted from the “whitewashed number of members”.

To what extent have the final convictions in Austria and Switzerland, as well as the pending Cologne public lawsuit influenced the decision makers at the Austrian Golf Association? I shall investigate further.

In any case, it is evident that Lyoness has made a convenient habit of withholding such information. Therefore, it seems safe to assume that Lyoness regularly takes on new (cooperation) partners, then, shortly after, the cooperation is quietly ended, without the knowledge of Lyoness members.

Lyoness Suisse GmbH withdraws its appeal at the High Court of Appeal in Zug! The conviction as a “snowball system” is therefore final.

Journalists have treated Lyoness (now “Cashback World”) for a long time as a “pariah” and their latest press release has once again validated this deserved reputation. But have a look for yourself!

Press release from the 31st of May 2015

The way Lyoness expresses itself in its latest press release is of almost unsurpassable arrogance. Now, Lyoness wants to prove that their actions are legally sound by ignoring the judgement pronounced by an ordinary court. Their renaming as “Cashback World” doesn’t change a thing. The CEO Adolf Weisskopf is aware that some members have been waiting for almost 10 years for the company to function properly, but so far only the managers are making any money from it.

Regardless of any sugarcoating, the fact remains that Lyoness has been convicted as a “snowball system” by a final judgement. In the case of Lyoness, the Austrian legal system has failed completely, it is tempting to speak of “Nigerian conditions” or a “judicial banana republic”.

The Lyoness General T&Cs are “NULL AND VOID”

The Supreme Court in Vienna has rejected the appeal

On the 18th of May 2017, the Austrian Supreme Court in Vienna delivered a long overdue, 53-pages-long verdict (Verdict Supreme Court General T&Cs, Ref. no. 10 Ob 45/16i) regarding the General T&Cs of Lyoness and rejecting the appeal made by Lyoness. The verdict, which had been stalled by Lyoness for a long time, sends out a strong signal. Apart from the fact that Lyoness has already been found guilty by a final judgement of being a snowball system, the court of final appeal has decided that all contracts/General T&Cs from 2007, 2009 and 2012 by and with Lyoness are “null and void”.

The Lyoness press release on the General T&Cs verdict is wrong!

In this blog entry, I will publish the latest press release by Lyoness, in which Lyoness comments on the verdict by the Austrian Supreme Court dealing with the company’s General Terms and Conditions. I will voice an opposing point of view, uncover any lies within the press release and will explain why many of the statements provided by Lyoness are false (my comments/adjustments are in red).

The verdict, comprising 53 pages, is clear. Lyoness must have been very concerned since the suit in question was filed, as it has far more members who are subject to the old Terms and Conditions than it would like to admit. Tens of thousands of its members have not switched to the new General T&Cs. The present final judgement by the Austrian Supreme Court is in line with a large number of civil judgements and it refers to all members (and not only to entrepreneurs), considering the Supreme Court’s explicit clarification that no distinction is to be made between alleged entrepreneurs and consumers. Lyoness disagrees with this last point!

LYONESS PRESS RELEASE:

LYONESS: THE SUPREME COURT’S DECISION (“DECISION ON CLAUSES”) RELATES TO CLAUSES OF THE TERMS AND CONDITIONS WHICH ARE NO LONGER BEING USED.

Lyoness accepts the verdict from July. The clauses have not been used since 2014. Lyoness will deal directly with any customer claims.

It is disconcerting that they are referring to the “July” verdict. It seems that either they haven’t read the verdict or they don’t have it at hand, as the sentence was pronounced on the 14th of May 2017.

Graz (OTS) – The Supreme Court’s decision regarding the legitimacy of clauses of Lyoness’ General Terms and Conditions refers to clauses which have not been used since 2014. The Supreme Court is therefore only assessing clauses which are no longer part of the current Terms and Conditions. Moreover, 60 out of the 61 clauses which were at that time subject to complaints made by the Austrian Consumers Information Association (VKI) applied only to entrepreneurs. Due to restructuring measures, since 2014 these entrepreneurs have been part of a separate business segment with its own contractual arrangements. Only one of the clauses which were declared unlawful, referred to members of the purchasing group. That clause has also been invalid since 2014.

It is ABSOLUTELY INCORRECT that other than one exception, all clauses refer only to “entrepreneurs”. This was explicitly stated by the Supreme Court in its verdict.

Obviously, the verdict applies mainly to the customer loyalty program and the purchasing group, because tens of thousands of members are still subject to the old General T&Cs. Lyconet did not even exist back then and even the General T&Cs from 2014 have not been accepted by everyone.

Customer claims will be dealt with directly. (Class) actions are not necessary according to Lyoness, because the company will deal with any customer claims directly as it has done in the past. Lyoness suggests to directly contact [email protected] for any requests, so that they can help their customers fast and in an unbureaucratic way.

Lyoness is mocking its members by trying to portray lawsuits as being unnecessary, because of Lyoness’ supposed gestures of goodwill. So far, a lawsuit has always been necessary with them and one thing is for sure, the lawyers of Lyoness do not shy away from lying in court. Moreover, even signatures have been faked by Lyoness members (as was proven in a recent case).

The Supreme Court’s verdict does not concern the purchasing group or the customer loyalty program. The cross-sector and cross-border cashback and customer loyalty program is not affected by this verdict. Our approximately 7 million members can therefore continue to benefit from purchasing advantages at around 75,000 partner companies in 47 different countries.

This verdict concerns ALL members!

And what about the vendors? The Supreme Court’s verdict is also interesting from that perspective and should be brought to light and commented on by the media. Especially in the years 2011/12/13 tremendous amounts of money were made at Lyoness by selling their country and business packages. At that time, there were different vendors covering various markets and offering the possibility to pay by cashback card and not only using gift vouchers. In Austria, among those accepting the CBC there were some renowned companies. Those vendors had to pay per CBC transaction 1.5 – 15% (depending on the industry) to Lyoness.

Lyoness is a customer loyalty program and not a pyramid scheme. Already in 2016, the Higher Regional Court of Vienna made it clear that Lyoness is not a pyramid scheme according to § 168a of the Austrian Criminal Code. Consequently, all investigations concerning this matter were stopped.

It is IMPERATIVE to clarify that Lyoness has been found guilty several times of being a snowball system, which is equally illegal. Lyoness IS a snowball system and not only due to their alleged sales and distribution activities.

Lyoness and the vouchers! Legally and financially innocuous?

All loyalty programmes (e.g. Miles&More) have to make financial provisions for non-monetary benefits like collected points or frequent flyer miles, as consumers can decide to redeem them at any point. As an example, Lufthansa has to set up millions on its balance sheet for its high-status miles-club members’ non-expiring frequent flyer miles.

Depending on the marge of the distributor, Lyoness promised its members vouchers up to a certain percentage of the invested sum after making down payments of EUR 2,000. The resulting entitlements for those EUR 2,000 payments make out at least 10% of the payed sum. These should have been financially provided for, even when they haven´t been redeemed. Considering Lyoness’ promise that all would be easy, as everyone would shop, it should’ve counted on a big share of the prepaid vouchers being actually required. This means that millions in vouchers or funds should’ve been set up for this. The same way, the involved distributors should´ve set up voucher reserves to be able to deliver them in cases of full payments. None of this seems to have been taken care of.

Allegedly, the Austrian fiscal authority only shows an interest in operating business activities in Austrian territory involving Austrian companies. Therefore, it suited Lyoness well to close the contracts with consumers and members through a Swiss company. The Swiss members, on the other hand, made the deal with the company Lyoness-Management GmbH, located in Graz (!!) This was never questioned, although the actual recruitment of Austrian members was done in Austria, the recruited distributors were approached from Austria, the vouchers on the orders were from Austrian companies and all connected advertising measures and materials were produced in Austria. Using a Swiss contract partner without operational offices in Buchs (no proof of actuality!), who wasn’t involved operationally, should be fiscally relevant. (The same applies to any other country)

We will see how the remaining voucher partners and the financial police react.