Thursday 28 August 2014

'Lyoness' lie faces official exposure in Australia.

Today's media release (posted below) from the 'Australian Competition Consumer Commission,' proudly declares that 'Lyoness'  has been under investigation, and will be prosecuted, as a suspected illegal pyramid/ referral marketing scheme cleverly dissimulated behind a 'legal cash back' scheme. 

The same document reveals that agents of the 'ACCC' have not yet looked beyond the ends of their noses. Consequently, they still fail to acknowledge that the mystifying labyrinth of 'Lyoness' companies has merely been the corporate front for the latest version of an evolving, historically-significant, criminogenic phenomenon which can be accurately described as, blame-the-victim 'Multi-Level Marketing Income Opportunity' cultic racketeering.

In reality, what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science. The impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organized crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers (including regulators), in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, leads,' etc.).

David Brear (copyright 2014)

ACCC takes action against alleged pyramid scheme operator

28 August 2014

The Australian Competition and Consumer Commission has instituted proceedings against Lyoness International AG, Lyoness Asia Limited, Lyoness UK Limited and Lyoness Australia Pty Limited (together ‘Lyoness’) for operating pyramid selling scheme and engaging in referral selling.
Although Lyoness has been investigated by regulators for conduct in other countries, this is the first court action taken against Lyoness alleging that the Lyoness Loyalty Program constitutes a pyramid scheme.
Pyramid schemes involve new participants providing a financial or other benefit to other existing participants in the scheme.  New participants are induced to join substantially by the prospect that they will be entitled to benefits relating to the recruitment of further new participants. Pyramid schemes may also offer products or services, but making money out of recruitment is their main aim, and often the only way for a member to recover any money is to convince other people to join up.  In contrast, people in legitimate multi-level marketing schemes earn money by selling genuine products to consumers, not from the recruiting process.
The ACCC alleges that Lyoness has operated the scheme in Australia from mid-2011 and that it continues to operate the scheme. The scheme offers ‘cash back’ rebates to members who shop through a Lyoness portal, use Lyoness vouchers or present their Lyoness card at certain retailers.
Whilst cash back offers themselves are not prohibited by the Australian Consumer Law (ACL), the ACCC alleges that the Lyoness scheme also offers commissions to members who recruit new members who make a down payment on future shopping.
“Pyramid schemes are often sophisticated and may be operated under the guise of a legitimate business. Although these schemes can appear to be legitimate, the most significant inducement for new members to get involved is to earn ‘residual’ or ‘passive’ income from new members signing up,” ACCC Chairman Rod Sims said.
“The concern with pyramid schemes is that the financial benefits held out to induce potential members to join up rely substantially on the recruitment of further new members into the scheme.  For these schemes to work so that everyone can make a profit, there would need to be an endless supply of new members."
“Under the Australian Consumer Law, it is illegal not only to establish or promote a pyramid scheme, but also to participate in one in any capacity," Mr Sims said.
The ACCC also alleges that the conduct by Lyoness breached the ACL prohibition on ‘referral selling’, where a consumer is induced to buy goods or services by the promise of a commission or rebate contingent on a later event.
The ACCC is seeking declarations, pecuniary penalties, injunctions, an order requiring the Lyoness website to link to the case report and costs.
As Lyoness International AG, Lyoness Asia Limited and Lyoness UK Limited are located overseas, the ACCC will be making arrangements for service on those entities.
The first Directions Hearing in these proceedings will be at 9.30am on 16 September, 2014 before Justice Flick in Sydney.
Release number: 
MR 217/14
Media enquiries: 
Media team - 1300 138 917


  1. Great news.

  2. Dave, Nice post. I've watched that video you provided. It sure made me laugh, the way that fellow was sweating! I wanted to tell you that I've found some pretty good articles on Saving Alpha ( It might require a short sign in to read articles. (They are interested in what stocks you might be following. I put in HLF for Herbalife and a few others, but the articles are worth it the short sign up. They are generally business related articles by free lance writers. There's plenty of MLM related. For instance, you can type: Amway into their search box and come up with a plethora of articles, I haven't had a chance to read all of them, but thought you might be interested.

    I think there has been a lot of headway by business authors to understanding the menace of opportunity fraud. I've even read some articles calling for RICO against MLM.

    The big mistake a lot of these MLMs have made is going public. That is what may bring Herbalife down. Amway, a private company doesn't necessarily have to make their financial reports public knowledge. I've contended for a long time that their claims of Revenue are fudged. How could a company reporting revenues of 6 billion plus be a scam? Propaganda to lure recruits.

    1. Thanks quixtarisacult.

      I have previously followed, and even participated, in proceedings on the investor platform, Seeking Alpha, but I stopped short of posting an article, because the editors/owners of SA want copyright.

      The usual claque of provocative 'MLM' propagandists, including 'Amway's' Lord Hee Haw, have been hovering on SA. Some of the anonymous comments posted in response to my own contributions have been the usual savage personal attacks which attempt to re-write, and trivialize, what I have actually said. In the end, I found SA to be a distraction from maintaining my own Blog.

      SA is very similar to Wikpedia, in that its moderators have had a very limited understanding of how the big 'MLM' lie functions. Consequently, they take no moral stand and have, thus, allowed the agents of racketeers to continue to post 'MLM' propaganda, mostly in the form of comments. To be fair, SA has posted many articles which have come close to the full truth about the blame the victim cultic racket lurking behind the 'MLM income opportunity' fairy story.

      However, what is now being said by certain SA contributors (like Matt Stewart), you and I were saying many years ago.

      Certain SA contributors have contacted me directly and acknowledged my role in exposing the cultic aspect of the 'MLM' lie.

      For obvious reasons, most of the attention on SA has focused on 'Herbalife,' although a number of commentators realize that 'HLF' is part of a much wider phenomenon.

      To my certain knowledge, US regulators and legislators have been following SA.

  3. David, many SA like papers I have read begin with correct observations, and then evolve into a confusing, mind-numbing quagmire of complete apologetic bullshit. They attempt to force a camel through the eye of a needle. If it tends to confuse me, what must it do to someone who is first examining the subject? It is spin-doctoring—first expressing some truth and then evolving it into a labyrinth of confusion and lies. Once they began to delve into theories of how ‘MLM’ can be made legitimate (or work) I know that the intent to defraud.

    Have you noticed ads which claim that 99% of people fail in MLM and then attempt to sell you the secret information that can put you into that 1%? I think they go as far as asking for your credit card number. People who believe in this 1% are like all the bird brains that tell me in comments that they are going Diamond. They need to be dragged through the Dragon’s Den to get an intervention.

    I am still chuckling about this erstwhile fellow on your video. I’d seen it before, and it never gets old. It appears that he has awoke from a trance and is looking for any way he can to get out of a very bad situation. We have a show like that called ‘Shark Tank’ but I have never seen anyone leave the stage in such utter embarrassment. I’d like to see an Amway screwball go on either one of these show, or even a Herbalife salesman. They would get a new hole in which to pass bodily waste through in addition to the one they have already got. I’d like to see your Amway ‘Lord Hee Haw’ go on. He’d most likely begin by saying "I know you've already heard that Amway is a scam, but I've got the real truth to share with you."

  4. To many of the commentators on SA, it still remains inconceivable that the entire so-called 'MLM Industry,' has been a giant lie.

    Yet, if you put any deluded 'MLM' recruiter in front of a panel of independent business experts, their reactions to the recruitment script, would all be the same.

    'Herbalife's' SA apologists have insisted that 'MLM' is a perfectly legal activity - to which I have replied that hundreds of so-called 'MLM' companies have been legally-registered, but what they have been doing, is fundamentally unlawful.

    The latest reality-inverting line of defence taken by the 'Herbalife' propagandists, has been that virtually no one joins 'Herbalife' with the intention of making money - they only joined to obtain the products at a discount.

    The 'Amway' Lord Hee Haw tried to convince the world of exactly the same tale years back.

    Do you remember how Steadson kept insisting that he had number of loyal retail customers (including his dear old mom) who just loved those 'Amway' products.

    The 'Lyoness' fairy story is essentially the same. The 'adherents' insist that the profits come from participants in the scheme who are simply trying to buy products and services at a discount and who are not trying to make money.

  5. Federal Court finds Lyoness scheme NOT pyramid

    The Federal Court today found that Lyoness is NOT a pyramid scheme, as previously alleged by the ACCC.

    This link will take you to the ACCC Media Release, issued today.

    The Lyoness 'News Release' can be found at this website link:

    1. Chris Rook - This merely proves the accuracy of my overall analysis - 'Lyoness' is the corporate front for a criminogenic cultic racket, designed to prevent and divert investigation and isolate its bosses from liability.

      This latest tragicomic news from Australia perhaps explains why law enforcement agencies have been so reluctant to tackle 'Income Opportunity' cultic racketeers.

      A mountain of evidence proves that 'Lyoness' is an extremely dangerous Austrian-based blame the victim cult, which has been churning victims all around the globe, but classically, the persons who prosecuted this Australian case, only presented a tiny part of what they have started to uncover.

      In effect, the judge in this case (Justice Flick), has thrown up his hands and lamely admitted that even he can't understand what has been offered by 'Lyoness'. All the same, Judge Flick decided that the 'Lyoness opportunity,' has apparently exhibited the characteristics of a pyramid scheme, but he has also decided to allow it to continue, because although rewards were dependent on recruiting more and more participants, they were also dependent on the participants buying more and more products.

      So, if this Judge can't understand what 'Lyoness' offers, what chance have victims?

      The one common-sense question which no one (least of all himself) seems to have asked Judge Flick, was:

      What would be your reaction if a member of you own family came to you and said that he/she had signed up with 'Lyoness?'

      Readers should watch 25 minutes into this Canadian 'Dragons Den' linked-video to see just what Judge Flick has apparently failed to recognise, let alone stop.