'Lyoness' is a cruel scam woven to trap consumers and business owners facing hardship in the current economic crisis. Globally, 3 million people have been lured into 'Lyoness' by a web of sugar-coated lies, starting with a 'free cashback card.' Instigator Hubert Freidl has then induced many victims to hand over thousands of euros to join a classic pyramid scheme dressed up as a business opportunity. Austrian media and authorities have been alerted and the 'Lyoness' web of lies is unravelling.
People who have been reading the content of this Blog may be aware that the memberships and investments peddled by Lyoness are effectively valueless and constitute nothing more than the right of participation in - and handing over money to - an obviously fraudulent racket, as well as the right to dupe others into doing the same.
Although the majority of these lies have already been demolished and are no longer maintainable by the Lyoness racketeers and the deluded adherents, it has been hard for the Lyoness sceptics and opponents to effectively destroy the delusion that Lyoness is a successful, growing enterprise, for the financial administration of the mystifying labyrinth of corporate structures active under the collective noun 'Lyoness' has shown nothing but a growing number of members, partner companies and, consequentially, turnover.
Of course, it has been reported that Lyoness has been filing the investments made by its members as debt, mainly for tax purposes. What has been glanced over largely is that these investments do indeed constitute a liability for the Lyoness racket. Indeed, the members have been promised incredible returns on their investments, which are supposed to stay within a system and could never disappear for they officially constitute a down payment on the future purchase of gift vouchers. Therefore, next to the growth in participation and turnover, the amount of future financial obligations (i.e. debt) grows at an equal pace.
Additionally, what the overall financial figures do not tell, is that when looking at local markets (and Lyoness branches) individually, participation and turnover do not grow everywhere, but just in countries where Lyoness is newly introduced to the general public. As soon as it has been introduced in a country, the amount of members increases rapidly, and so does the turnover. However, when the market becomes saturated (i.e. no more people are interested in handing over their money to Lyoness) and, consequentially, criticism starts to appear on local forums and Blogs, the growth rate stagnates and eventually declines entirely.
Since most 'developed' countries have been entered by Lyoness, this pattern starts to show in the overall picture of the 'company' too. In an attempt to avert the inevitable disastrous collapse of Lyoness (and there with, the dreams of 3,000,000 members), Freidl has therefore moved his racket into countries where people often own insufficient funds to buy proper food. It is doubtful whether those countries will produce a sufficient amount of investors to keep the Lyoness racket up and running for much longer, unless Freidl has found a devious way to benefit from developmental aid, much like Herbalife has been pulling off in recent years.
In early entered countries like Switzerland, the turnover has already been reported to decrease, resulting in a situation in which the turnover (and/or assets) of (for instance) Lyoness Switzerland does no longer cover the incredible amount of debt that Lyoness Switzerland has built up in earlier years. So far, such gaps have been filled up with illicit earnings from newly entered countries, where the membership rates and turnover grow immensely. However, this system will no longer offer a way out when the Lyoness racket runs out of countries to expand to, and therefore, looses its source of revenue. Unless Freidl thinks of a way to considerably increase the inflow money into Lyoness (which he could do by starting a new racket, having his current followers put in additional investments, or maybe by convincing at least some of his members to go shopping once in a while), the Lyoness racket will soon fully collapse - for now it remains effectively bankrupt.
Under the motto 'there are idiots everywhere' ('deppen gibt es überall', a reference to 'Gemma Deppen Suchen', 'go find me idiots', which is how Hubert Freidl referred to his earlier racket 'GTS'), Lyoness has expanded its racket into developing countries like Somalia, Pakistan, Nigeria, Sudan and Saudi Arabia.
Apparently, the Lyoness racket is running out of 'idiots' in the developed world, - the term Hubert Freidl uses to denote his followers - and is now looking for more 'idiots' amongst the poorest people of the world and is looking to steal the money of people who often cannot afford decent housing, food or water. However, they will now at least get a minor discount while attempting to fulfil these primary needs.
The mystery is how Freidl plans to attract enough capital from these 'idiots' to cover the immense financial gaps he has been dropping in the rest of the world, but perhaps he will - like his American friends over at Herbalife - find a way to abuse systems designed to bring development to these countries. Charitydoes seem to be the core business of Lyoness after all...
"[The publishing of television episodes and other stories about Lyoness] may cause a mass exodus of customers, business partners and employees. There will be an irretrievable loss of confidence [in Lyoness] of customers, business partners and employees. Lyoness' economic reputation was permanently damaged by [Plattform Lyoness]."
What we don't understand is: how could 'a bunch of unsuccessful, anonymous losers with a free Blog that anyone could make', take down such 'a powerful, legitimate company, based on the pure power (through a brilliant, ingenious system) of never-ending consumption'? Maybe the system was not flawless after all?
No, that is of course a preposterous suggestion. Its imminent ruination cannot possibly be Lyoness' own fault - so it must be the sceptics', spreading 'filthy lies' about this Austrian masterpiece without allowing any of the poor masterminds behind it a chance to speak up for themselves and explain that we are completely wrong and out of line (probably they forgot that Vorbach had nothing to say about the ORF Report episodes, and that Freidl declined to comment entirely). Also, if anyone is disappointed, they must have been misinformed by a rogue distributor, who did not follow the guidelines and decided to deviate from the proven plan which guarantees success (in the form of financial freedom).
Readers of this Blog should be aware that this type of convulsions is common for a fraud that has had its best days. It's the fault of everyone, except the instigators or the system. If the Austrian authorities will move on a bit and finally forbid the Lyoness racket for what it is (and hold the responsiblesto account) before it implodes and disappears into a new, copycat racket, it will definitely be the fault of the authorities - who 'robbed their citizens from the opportunity to be finally independent and fully happy and wealthy'.
Plattform Lyonessreports that the answers of the ministers will come in on Tuesday (25 June). In the mean time, Plattform Lyonessreports to have received an email from Gerhard Huber in which he declares his continuous support for the cause of the founders of the victim's interest group and promises to continue his political fight against the 'company':
--- "Subject: Leitbetriebe Österreich Dear ladies and gentlemen, first of all I must thank you for sending all the information, and I want to apologise for my late reply. Mr Bucher has forwarded me your email about Leitbetriebe Österreich, because I follow the case of Lyoness for quite some time now and have already posed several questions to different government ministers. I have therefore read your writings with greatest interest and I can assure you that I will continue to work on the case of Lyoness with all available parliamentary means. As an example I have attached the most recent questions to this email. A response is required by the statutory deadlines before 25.06.2013. You will be able to find the responses at the following links: http://www.parlament.gv.at/PAKT/VHG/XXIV/J/J_14534/index.shtml http://www.parlament.gv.at/PAKT/VHG/XXIV/J/J_14535/index.shtml Kind regards, Gerhard Huber Member of the National Parliament"
---
In other words, Lyoness victims who have put down advance payments on vouchers for these companies, will probably not be able to use their vouchers if they ever actually receive them (that is, if they bring in enough new victims). Of course, it is scant consolation that the actual vouchers are irrelevant to the systems operated by the Lyoness racketeers. The vouchers merely serve as a redundant disguise, designed to cover up the pyramid scheme.
Plattform Lyoness has just reported the breaking news that managing director of Lyoness Americas, Mario Hoffmann, was formerly involved in the convicted Austrian pyramid scheme 'DESCO'. According to their information, Hoffmann and three accomplices were found guilty of operating the scam. 'DESCO' was hiding behind a redundant and apparently not-existing corporate front that organised 'seminars' of all sorts.
Particularly many young Austrians were enticed to invest thousands of euros for the promise of incredible future rewards, if they would only bring in their family and friends. Much like Lyoness now, 'DESCO' had a controversial reputation at best, before being completely wiped out, with the Chambers of Labour of Wien and Niederösterreich, several established media and even members of parliament questioning the 'company's' motives.
There is reason to believe that the same scam formerly operated under the name 'DESCO' persisted long afterwards, perhaps with the same people (informally) running it.
Until now, the Lyoness Complaint Centre has reached over 25,000 page views. This means that we have reached about 3,000 unique viewers. We are very grateful to everyone who helped us reaching these viewers and informing them about Lyoness.
However, we are an ambitious blog. We will not rest until we have reached at least as many people as Lyoness has scammed (an estimated 2.8 million people). Therefore, we will need your help!
Help us spread our message!
Share your stories, experiences and information about Lyoness with us; file your complaints!
Follow us on Twitter, Tweet our articles; Like and Share us on Facebook and Google+!
Below, (a translation of) the email about this, sent out by Robert Wehrli, managing director of Lyoness Switzerland:
--- "Subject: The Lyoness Lead Academy has started Dear Member, with the official start of the Lyoness Lead Academy you and your team have an amazing training program at your disposal. Due to the enthusiastic response caused by the existing training and education program, the concepts have been further developed and perfected to meet our highest standards. Let the result overwhelm you! In the first module - the Shopping Network Seminar - you and your team can already set the course for success in Lyoness' referral marketing. Following the principle 'Modelling of Excellence' you will get acquainted with those successful in Lyoness and their experiences and strategies. To follow a proven road and to acquire the established recipe for success is the fastest and most effective way of becoming successful yourself - use this opportunity to make your way to the top! And of course: the more participants in your Shopping Network that complete this education, the faster your career will develop as well! Benefit from this opportunity as soon as possible (today) and apply for one of the upcoming Lyoness Shopping Network Seminars!" --- No reader of this Blog will be surprised to read that we at the Complaint Centre consider this blatant attempt to control the minds of the Lyoness hordes despicable and a major offence. To clarify, hereby we refer to the mass indoctrination that commonly takes place on such events, combined with the deviously deceptive flawed logic that is imprinted in the minds of the deluded adherents, which boils down to the following: To gain a place in a future, happy and wealthy Utopian world (usually entitled 'financial freedom'), the only thing you have to do is copy what others have done (i.e. follow the proven recipe for success); which is: invest as much as possible into Lyoness and convince others to do the same. As we have it on good authority that Hubert Freidl is increasing his level of involvement in 'minor' Lyoness events, and has been partying with his closest followers for 10 days in Austria, we are very curious whether professor Freidl himself will be teaching the seminars. If so, the title of his first lecture may well be: 'positions, positions, positions, positions'.
Earlier, it was reported that (former) Lyoness victims that have bravely faced reality have demanded retribution from Freidl and his friends, and that some extremely disillusioned examples have also uploaded sales ads on sales websites similar to eBay.
Apparently, this was only the tip of the iceberg. Much like victims of for instance the Herbalife racket offering their unsaleable, hugely overpriced wampum at an incredible discount on eBay, on Austrian auction/sales websites, an increasing amount of disgruntled Lyoness victims, who have completely lost faith in ever seeing a cent back from Lyoness (either through recruiting new members or being reimbursed by Lyoness), upload sales ads offering their 'positions' or 'accounting units' for a fraction of the actual 'value'.
The guys over at KTipp counted 11 ads, with a total price of 23,290 euros - obviously a fraction of the price paid by the victims who now try to sell their packages.
The same goes of course for the (still) active members of Lyoness who try to peddle positions - as Freidl has already stressed that any wrongdoing towards members is the (legal) responsibility of their recommenders.
Contrary to what Lyoness, its clones, its instigators and a selection of its (former) adherents may claim, the Lyoness lie has been premeditated and meticulously orchestrated to denude its victims from its money, happiness and freedom.
Not only have the Lyoness instigators been deviously clever in hiding their trails and obstructing justice, they have also thought through every single step of their latest racket in order to enroll and dupe as many people as possible, without getting caught and probably without being held to account when the walls come down.
As reported earlier, the disguise of the Lyoness racket was tailored to meet the spirit of current times and the specific character of a country's society. In the United States, Lyoness emphasises that its business model has nothing to do with 'MLM'; in other countries, Lyoness propagates how 'MLM' is the way to 'financial freedom'. Additionally, the adherents (i.e. propagators) of Lyoness have been instructed to modify the recruitment techniques (by altering the standard scripts available through Lyoness and upline members) they use to enroll new victims, to the specific problems, fears, needs and dreams their prospects may have. For instance, the current economic crises have been used to enroll new 'loyalty merchants', saying that Lyoness is the way for (particularly) small and medium-sized enterprises to build up a loyal customer base, and consequently increase the sales, turnover and profit of these enterprises. Their owners have been deceived into believing that they will be the main beneficiaries of the Lyoness 'business model', whereas consumers have been told that the loyalty merchants are the ones paying for all their extended benefits.
In order to perpetuate their perfectly tailored lie, Lyoness and its instigators had to make a serious effort to establish and maintain a monopoly on the information that is available about Lyoness. One of the ways to achieve this was telling their deluded followers that it's of elementary importance to them achieving the success they've been dreaming of, that they never speak with anyone who's not a member about Lyoness, without decent preparation and an upline present. Another, more visible, method used by Lyoness is to contest every allegation against 'the company' on the Internet, and making - for instance - false copyright infringement claims to get the truth removed. Using these tactics, combined with immediate threats of million dollar lawsuits, Lyoness has even managed to get the Austrian public broadcaster (ORF) and Youtube (owned by corporate giant Google) to remove the truth about Lyoness from their respective websites and servers.
Consequently, it was Lyoness who had the sole right and opportunity to inform its prospects about 'the company'. The way in which this was done, obviously, was orchestrated as well. Using cultic techniques known as 'Neuro-Linguistic Programming' in all its propaganda, Lyoness created a step-by-step timeline, based on which should be decided how much information a person is allowed to, and capable of receiving and processing at that stage (that is, without dropping out of the system).
As stressed earlier, the 'Cashback Card', all other 'discount systems' and the affiliated 'shopping community' are a smokescreen, developed to lure unwitting victims into the web of lies spun by Freidl and his friends to deceive everyone out of as much money as possible. Before joining in on that (regardless of whether one joins as a consumer or as a 'loyalty merchant'), prospects may have been shown nothing more than publicly available information about 'the company' (i.e. what Lyoness has decided to put out there). This information barely makes any reference to the 'position system', if any. This video is an example of such information:
When signed up for the 'Cashback Card', the real fun commences. As stressed by Hubert Freidl in private, the core-business of Lyoness is 'positions, positions, positions, positions' - the discount card is irrelevant, and only useful to give Lyoness a legitimate-seeming disguise, designed to lure more people in. That shows. As reported earlier, only a few Lyoness member actually ever use the 'Cashback Card', and their average savings are scanty at best.
When the next stage in the membership has been reached, the next stage of information-allowance can be entered. Now that the member has visited one or several meetings and has been convinced that Lyoness is 'an excellent company', offering a 'revolutionary system', it is time to bring out the big guns - the position system. Of course, first the thought-stopping nonsense that has been shown to the member earlier is show again. This includes a fixed combination of the benefits for both shoppers and shops, the charity Lyoness and its instigators support, the certificates, the history of the 'company' and the affiliation with major corporations, who apparently have endorsed the Lyoness 'business model'. Also, it is once again stressed that if a member recommends new Lyoness members, a minor percentage (0.5%) over the purchases of these members (and the members they bring in) at Lyoness 'loyalty merchants' will be paid to the recommender.
Then, a little more of the big secret is revealed. Easing in to it, Lyoness emphasises that the discounts listed on their website will not be fully paid out in 'cash back' - part of it will be transferred into a system that saves up the left-over discounts into 'positions'. The irrefutable logic is presented that if more people shop, more discounts get saved up, and therefore, more positions are formed. Then, it is promised that if enough positions (70) have been saved up by shoppers, there will be a financial reward for the owner of the first position.
This all sounds good and still legitimate. However, both the 0.5% 'friendship bonus' over the shoppers brought in and particularly the saving up of discounts resulting into a considerable amount of positions, assumes and requires a considerable amount of shoppers - and considerable spending of these shoppers at the Lyoness 'loyalty merchants'.
Although Lyoness puts emphasis on this system thriving on an endless stream of shopping expenses (which 'will always be there'), it hints at the improbability of a lot of positions getting created by shopping, or at least, the long time it may take before this actually happens. Therefore, Lyoness offers its carefully prepared prospects a solution: the positions can be bought. This way, one gets a head start for when the millions of shoppers are going to role in and buy all their daily groceries and other (luxury) shopping through Lyoness. At this stage, it is disclosed that money can be made through the position system. However, the focus still lays on 'being in first and benefiting from additional positions created by shopping'.
Then, the premium membership is presented. To seem legitimate, Lyoness (currently) first presents the possibility to become a premium member through an extreme amount of shopping expenditures (20,000 euros) at the Lyoness 'loyalty merchants'. This is glanced over, because of course, the second option is way more interesting, shows that the member in question has 'vision' and is a 'top' or 'premium' member. This second option is, obviously, purchasing positions in the position system. If one buys 13 at once (7 of 50 euros; 3 of 150 euros; and 3 of 400 euros), the premium membership is obtained.
Are we done then? No, of course we're not. As soon as the premium membership is obtained, the focus shifts to recruiting. Obviously, again the entire compiled list of advantages tied to Lyoness is summed up (save the world, the environment, huge discounts, etc.), and in the very end, the possibility to become an 'Independent Business Representative' (IBR) is presented. When the opportunity to become an IBR is presented, suddenly saved up, left-over discounts are no longer the important source for constructing new positions - recruiting is the new key word.
Lyoness claims to be looking for 'visionary people', who see that this business will grow over the entire world (a comparison with companies like Apple and Google is coined). Not only will the amount of shoppers and shops affiliated with Lyoness grow considerably; the amount of premium members (i.e. position-buyers) will grow exponentially too. Therefore, acquiring as many as possible positions in the system now, will lead to huge rewards in the future. These rewards will start coming in as soon 4 people have been recruited into Lyoness, provided these 4 people have acquired at least one unit in the position system. Then, based on the amount of positions acquired by the people brought in, and the career level that has been obtained (which is, of course, dependent on the amount of positions as well), a monthly 'system commission' or 'volume commission' is paid out. Of course, then six or seven figure incomes are for grabs.
Everything is dependent on the position system. Or as Hubert Freidl puts it: 'it's all about positions, positions, positions, positions'.
And of course, to get people in and to get them to acquire positions, everything is permitted.
To enhance the confusion, and to make sure that no-one drops out, psychological pressure is applied, critics are discredited and intimidated with lawsuits. The truth that does leave the private sphere of Lyoness (which is inevitable with 2,800,000 members worldwide), gets contested or challenged with false copyright infringement claims. Also, Lyoness has tried to make the truth 'irrelevant' to new members and other observers of Lyoness, by complicating the understanding of Lyoness' 'business model', for instance by constantly changing the terms used for various aspects of this 'business model', which also are often not, not-sufficiently or merely vaguely explained and/or used elsewhere in official Lyoness communication (therefore, the Austrian Consumer Union; VKI; has hired Eric Breiteneder to sue Lyoness). A while ago, 'loyalty merchants' were still called 'trading partners'; 'premium members' were called 'business partners', 'accounting units' were called 'positions'; and 'volume commission' was called 'system commission'.
English author David Brear’s [unchallenged], copyrighted study of [Lyoness] concludes that: 'Lyoness is an unoriginal, blame-the-victim, cultic racket comprising a dissimulated closed-market swindle and various, related, advance fee frauds’ (Wikipedia).
'Lyoness' is a lie and Hubert Freidl is its author (September 2012):
This idea is mainly perpetuated by Lyoness, which is not a surprise, but also by Lyoness-clones which are sprouting all over the world (and claim to have taken the 'brilliant elements' of Lyoness and hired ethical people to execute this ingenious idea), and, ironically, by a considerable amount of Lyoness victims, who have come to the horrible realisation that the chances of them seeing their investments into Lyoness back are slimmer than an anorexic on Herbalife shakes.
The reasoning behind this is, is actually surprisingly simple to understand. Facing up to the horror brought to people by Lyoness implies a) acceptance of being scammed and fooled, no matter how many precautions were taken; b) that the incredible sum of money that has been invested into Lyoness, and which may have been borrowed money, is likely to disappear into the pockets of Austrian racketeers; c) that the dream of financial freedom is completely shattered, and that passive income free, excruciatingly long days at a 'stinky job' with boring colleagues is what awaits for the future and d) that the same deception has undoubtedly been peddled to the entire contact list enthusiastically compiled in the beginning weeks of the Lyoness membership in expectation of financial freedom, which could only be achieved by compiling a list of as many acquaintances as possible (probably including the closest social contacts such as kids, parents, siblings, BFFs, etc.), and approaching all of them to join Lyoness and invest money too.
Unquestionably, it is extremely hard for these people to snap out of the deceptive dream entirely and face up to what has been going on here. Obviously, we, the Lyoness Complaint Centre, developed to support victims of the Lyoness racket, sympathise. Unfortunately, the same level of sympathy should not be expected from Lyoness, which will drop the victims like a rock and will say that if they did not achieve the dreams they set out for themselves, this is caused either by being misinformed by their upline (which consists of 'independent business representatives', technically unaffiliated to Lyoness and its instigators), by having - self-constructed - extremely irrational and unrealistic dreams, or by simply not working hard enough or not believing enough in yourself or the system - which is 'flawless', of course.
Most probably, the racketeers behind Lyoness are already working on their next scam, if it has not been launched already. Readers of this Blog, and in particular the ones who have been involved in Lyoness, are warned that the affiliation between the new scam and Lyoness will obviously be meticulously hidden. Thus, any of the companies now propagating to run the same system as Lyoness, just with better people, is a plausible candidate to be Freidl's next masterpiece.
Do also note that terminology is interchangeable. Whether it is an elevator or a lift you have to wait for, it may be unpleasant in any case. So, no matter whether you are approached for 'MLM', 'Network Marketing', 'Recommendation Marketing', 'Direct Sales', 'Franchise', 'Crowd Funding', etc., please be on alert. If the idea is that you pay money, and you ask others to do the same - it's likely to be a scam (or a fraud, or a swindle, or a pyramid scheme - just pick one). After the whole Lyoness experience, perhaps it is wise to refrain from joining any 'golden opportunities' for a while.
Unfortunately, the same goes for excrement. No matter how a swindle is dissimulated or disguised, it remains a swindle.
As we said, we do sympathise with the situation of the victims of the Lyoness racket and we are here to help out, if its needed. We do understand it must be hard to face reality in these times, but only then there is a chance for retribution and closure. Also, by telling your story to the world, you can prevent these fraudsters from enrolling new victims and starting new, similar rackets.
After the struggle of keeping the ORF Report broadcast on Lyoness merely available on the internet, and after publishing the video with English subtitles (thanks to @LyonessVictims), and with Dutch and Italian subtitles (thanks to the Italian Lyoness Complaint Centre) we gladly announce that the Lyoness video is now also available to Serbian-speakers, for we have received the subtitle file for this video in Serbian.
The subtitles can be selected by holding the cursor over the video and clicking either 'CC' or 'Subtitles' at the top of the video. There 'NL' (Dutch), 'EN' (English), SR (Serbian) or 'IT' (Italian) can be selected to match the video and your preferences.
We appeal to the readers of this blog to translate the English subtitle file into their native language or any other language they speak and send it to us - so we can share the truth about Lyoness with even more people worldwide.
You can also download the original video and add your own subtitles.
