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Thursday 18 January 2018
'Lyoness/Lyconet' racket finally gets busted in Norway.
The following are automatic translations. _______________________________________________
On 11 January 2018, the (Norwegian) Lottery Authority issued notification of a decision with a decision to stop Lyoness' work in Norway.
publishedJanuary 17, 2018
The notification of decision is against Lyoness Europe AG and Lyoness Norway AS, but will also include 150,000 Norwegian participants and 1,000 loyalty companies included in the Lyoness sales network in Norway.
Illegal pyramid-based sales system
Based on testimony, the Lottery Authority has rejected appeals in 2016 and 2017, and the content of that, found grounds for assessing whether Lyoness is an illegal pyramid-based sales system after the Lottery Agreement Section 16, second paragraph.
In assessing, we have concluded that the revenues from Lyoness' business in Norway mainly depend on the illegal acquisition of participants, and not from the legal sale or consumption of goods, services or other benefits.
Lottery Authority's conclusion
In the notice of decision, the Lottery Authority concludes that Lyoness's work in Norway is an illegal pyramid-based sales system pursuant to section 16, second paragraph, of the Lottery Act.
We have paid particular attention to the fact that Norwegian participants in Lyoness do not receive or consume goods, services or other benefits from the sales system that correspond to the value of what is paid when they pay for them. Participants' payments to Lyoness are as a consequence of this to be regarded as consideration to participate in a pyramid-based sales system. The income of the company and the individual participant is related to the acquisition of new participants and those payments to Lyoness, and not from the sale or consumption of goods, services or other benefits.
In a letter dated 11 January 2018 , the Lottery Authority has warned that we will make a decision that Lyoness must stop all work in Norway. Notification of resolution means that all repatriation of participants and loyalty companies to CashBack World and Lyconet, and all sales and use of benefit cards, discount coupons, customer card shares, gift cards, promotional materials, seminars and other products in the workplace must be terminated.
The Lottery Authority's notification of decision basically bases itself on the information we have received from Lyoness in case.
Repayment when shopping, own shopping points and lucrative shopping offers are among the benefits the Lyoness lure attracts to get new members.
The Switzerland-registered network has its own subdivision in Norway, with around 150,000 Norwegian participants and 1000 so-called loyalty companies as part of their sales system.
Is a distribution and trade network that was created in Switzerland in 2003 by Hubert Freidl.
The system is structured so that you can get benefits in terms of getting a small portion of the amount you pay for.
The Norwegian subdivision Lyoness Norway has approximately 150,000 Norwegian participants and 1000 loyalty companies as part of their sales system.
Lyoness Norway is led by Claes Gunnarson.
Now the Lottery Authority will stop its business in Norway. The audit believes Lyoness is a pyramid-like sales system, and issued a decision last week for a decision on pending orders in businesses n. Lyoness disagrees with the audit's statement, saying that it will respond to the audit's case-making.
In its assessment, the Lottery Authority has emphasized that Lyoness's revenue is mainly due to the acquisition of participants and not from the sale and consumption of goods and services or other benefits.
The Lottery Authority writes in the letter that it announces that, from the summer of 2016, a large increase in the number of inquiries about Lyoness's activities in Norway from participants, family, friends to participants and persons who had been tried to report that Lyoness was running pyramid games, recorded a large increase.
Lyoness has a four-week deadline to object to the decision that has been notified, or the basis for the notification.
Disagree with the production
Leader Claes Gunnarson in Lyoness Norway answers the following criticisms in a press release: "Lyoness has received a preliminary decision from the Norwegian Lottery Authority. Lyoness emphasizes that this is not a final decision.
Lyoness disagrees with the Lottery Authority's case-making, and is particularly surprised at the preliminary decision to suspend Cashback's cash benefit program. The cashback card is free and is used by over eight million members globally and 160,000 in Norway for purchases of goods and services at approximately 1000 Norwegian stores and online stores.
Lyoness is now going through the preliminary decision with the lawyers, and will respond to the Lottery Authority's argument. We believe Lyoness is a legitimate business and will respond to the Lottery Authority's charges ".
The Lottery Authority believes Lyoness operates illegally - 150,000 can be affected
All activities in Norway can be stopped.
The Lottery Authority has concluded that Lyoness's operations in Norway are an illegal pyramid-like sales system, the Lottery and Foundation Supervisory Authority writes .
"We have paid particular attention to the fact that Norwegian participants in Lyoness do not receive or consume goods, services or other benefits from the sales system that correspond to the value of what is paid when they pay for them, writes the audit.
As a result, the participants' payments to Lyoness are considered as consideration to participate in a pyramid-based sales system. The income of the company and the individual participant comes almost exclusively from the replacement of new participants and their payments to Lyoness, and not from sales or consumption of goods, services or other benefits, the audit writes.
Managing Director Claes Gunnarson in Lyoness Norway AS disagrees with the Lottery Authority.
Background is a prudential case that was created last year. In a letter dated 11 January, the Authority notified Lyoness of a decision to suspend the company's activities in Norway.
The notification is directed against the Norwegian company Lyoness Norway AS and the international parent company Lyoness Europe AG, affecting approximately 150,000 Norwegian participants and approximately 1000 loyalty companies included in the Lyoness sales network in Norway.
Furthermore, it means that all referral of participants and loyalty companies to Cashback World and Lyconet, and all sales and use of benefit cards must cease.
The decision is not final and Lyoness has four weeks to come up with his opinion on the matter.
Lyoness disagrees with the Lottery Authority's case-making, and is particularly surprised by the preliminary decision to suspend Cashback's customer benefit program, according to Claes Gunnarson, Head of Lyoness Norway AS, in a press release. It reports BA (requires subscription).
Lyoness is a distribution network established in Switzerland in 2003 and has over seven million members in 47 countries.
The prosecution of Lyoness, named under the name of Lyconet, was stamped by the Lottery Authority as illegal pyramid play, until a structural change in 2014 no longer gave the audit grounds for thinking this, writes BA.
The newspaper also writes that several Lyoness members in Europe have sued the business and received significant sums of money