In more and more places on the internet, people start to ask the question whether the Lyoness 'position system' is not actually a 'Ponzi scheme' in disguise. The short answer to this would be 'no'. A Ponzi scheme uses the money of its (new) investors to pay off the same or earlier investors. The investors are unaware of where this money is coming from and at some point, if the market for new investors or investments is saturated, the scheme collapses. Then, and only then, everyone starts to realise that the investors that have been paid dividends, have only received those because new investors joined the scheme later or existing investors decided to invest more. Especially in the beginning stage, the returns in a Ponzi scheme are usually high, as this will encourage and persuade investors to make additional investments and to tell their friends and family to do the same. One of the most famous Ponzi schemes recently operated was that of Bernie Madoff in the United States.
Although the distinction may seem somewhat arbitrary, the Lyoness 'position system' is what is commonly known as a 'pyramid scheme'. In a pyramid scheme, or 'pyramid game' if you will, investors are also paid returns (if any) deriving from the investments made by new investors, yet only if they (albeit indirectly) bring in these new investors themselves. In other words, in order to get any part of your investment back, you will need to recruit new prospects to do the same as you did: pay. If you find enough investors (which may be doable when you join early, but is nearly impossible when you are enrolled later), you may even make some profit. Naturally, these profits are illegal and in most countries you can be convicted for promoting, or even just participating (i.e. investing) in a pyramid scheme. The major difference is therefore that the participants of a pyramid scheme (contrary to those of a Ponzi scheme) are at least aware that (parts of) their Utopian profits will only come to them when they enrol enough new people.
Of course, organisations operating pyramid schemes go through incredible lengths to mask their illegal and pernicious activities. Therefore, not every investor is aware of what is going on, yet if not under influence of the propaganda spread by the instigators and/or adherents of the scheme, they probably would have seen what was happening. A pyramid scheme usually spreads faster than a Ponzi scheme, because the participants know at least that recruiting is essential for their profits. Also, it is cheaper scam than a Ponzi scheme for the instigators, as pyramid scammers do not need to pay a lot of returns in order to make people recruit - they are deluded into thinking that the money will come eventually. Additionally, pyramid schemes usually target a different audience than Ponzi schemes - commonly people with less financial experience than the big-shot investors that may be persuaded to invest in a Ponzi scheme. This is logical, as large investors would probably see through the scam or at least hire someone to do that for them. Also, since the pyramid scheme is promoted and spread by its victims, the amount of the investments can be lower, as more people will join, rendering a high turnover without needing hundreds of thousands per investor.
Anyway, participation in both Ponzi schemes and pyramid schemes nearly guarantuee you that you will lose (most of) your money. Also, it guaratuees early investors (usually friends of the founder(s)) and the instigator(s) incredible profits. Therefore, Lyoness decided not to stop at letting people invest 2000 euros in their fraudulous position system. Instead, they decided to try to increase the amount of positions existing victims would invest in, as well as ask some of the core investors to invest large sums of money in 'advertising campaigns', which were guarantueed to considerably increase their income as soon as country would enter 'phase 3'.
Much like in case of the many follow-up scams that circulate around the known victims of a fraudulous organisation, this is a form of abusing the power you have gained over a victim and the vulnerability you have created in order to get more money out of the same victim. Take truck driver Andy, for instance. He blatantly admitted to not having invested just 2000 euro (3000 dollar), but 10,000 dollar, in phases. It did not seem to bother him that he had to lend money against his house, as 'the returns from Lyoness would overpower any interest percentage'. This is still part of the pyramid scheme, but the investments in the advertising campaigns probably constitute a Ponzi scheme. The already deluded and brainwashed victims of Lyoness were persuaded to participate in a way to make 'even more' money, by investing in advertising campaigns in countries like Austria and France. Although Lyoness indeed spent some budget on buying up television commercials and billboards, only about one-fourth of the collected investments were used to pay for the marketing activities - the rest has disappeared. It is unclear whether anyone has ever received any returns over their investments in the advertising campaigns.
The tactics of the Lyoness instigators are pretty straight-forward. Lure people in with a 'free' discount card or additional customers for a small shop or company. Invite them to a meeting and tell them about the amazing piles of money they can make by buying positions in the Lyoness position system. Once they do so, tell manipulate them into persuading their social connections to do exactly the same thing. When their social connections are dried up, use the last bit of control you need to make them buy more positions and/or shares in advertising campaigns in order to suck them financially dry. Pernicious to say the least.