Lyoness: you were scammed, but not by us

*For more information about whether Lyoness is a scam, also see our recent FAQ post: 'Is Lyoness a scam?'

Readers of this Blog will be well aware that Lyoness is collapsing as we speak. More and more parts of the pernicious scam are revealed to the general public and prosecutors and authorities in various countries have started investigating Lyoness, with the inevitable conclusion that Lyoness and its instigators (and possibly some of its core-adherents) have been operating a series of blatant scams, hidden behind an effectively valueless discount card.

Recent findings have shown that Lyoness members have been taught to lie and deceive, in order to peddle a pyramid scheme based on down-payments on redundant gift cards, apparently issued by Lyoness' major partner companies (who often have not got the faintest idea what Lyoness is and that they are listed as a Lyoness partner), as well as a series of related scams, such as investment schemes revolving around the advertising campaigns in certain countries in which Lyoness operates. It also became known that effectively no-one other than the Lyoness instigators and an extremely select group of core-adherents has made any money off of peddling this racket to new victims, and that Austrian courts have begun to demand that Lyoness reimburses disenchanted investors - particularly those who invested in the risk-free (yet also prospectus-free) advertising campaign investment schemes.

Traditional media - mainly in the countries where Lyoness originated - have increased their attention for the subject, featuring relatively thorough exposes of Lyoness on public television and in major print sources. Additionally, victims seem to be gathering. Recent notable examples are the 300 Australian victims that demand retribution from Lyoness (and a few related court cases over there) and the list of victims that have approached Plattform-Lyoness and/or attorney Eric Breiteneder (who is currently representing about 300 Lyoness victims, as well as the Austrian Consumer Union, which is also suing Lyoness) in Austria. As said, Breiteneder has won several cases against Lyoness, in which the fraudsters were forced to reimburse their investors. Additionally, an increasing amount of prosecutors and authorities are concerned with the fraud Lyoness has been spreading over the entire globe. Also, several former managing directors of Lyoness have turned against the 'company'.

Combined with the exponential growth of the amount of holes that are shot in Lyoness' fraudulent fairy tales, by an increasing amount of sources, including Wikipedia, Lyoness is running out of options to defend its 'company'. Where in earlier stages, Lyoness and its instigators immediately sought publicity to claim that their 'company' is a legitimate shopping community, which innocently offers discounts to shoppers and increases the sales for small and medium-sized enterprises, as soon as any allegation would pop up in the public domain, Lyoness now effectively has only three things left to do. Firstly, Lyoness uses every opportunity it gets to obstruct justice, both by complicating legal procedures and by sheltering the public from any form of criticism (i.e. the truth) publicly available about Lyoness. Secondly, by starting follow-up scams, seemingly unrelated to Lyoness, yet frighteningly similar to the fraud operated by Freidl and his friends and enrolling (former) Lyoness victims into these new scams.

The third one is the ultimate sign of a collapsing fraud. Lyoness is now publicly no longer refuting the idea that anyone involved in Lyoness has been scammed out of their money, but instead admits that this may have happened, followed by the immediate incriminating claim that rogue distributors are responsible for these damages - not Lyoness or its instigators.

Plattform-Lyoness has published (parts of) legal documents in which Freidl himself talks about Lyoness and issues the following, somewhat remarkable quotes:

Freidl: "Throughout the last year (2012) for example, there have been just 30 to 35 people who have demanded their money back and for which we have made ​​ex gratia solutions." Exp: "So you think that there are 30 to 35 people who wanted their deposit back?" Freidl: "Exactly. And for which we have found a  solution. And we fixed it." Exp: "Why did they get their deposit back?" Freidl: "Because they were wrongly advised. Or misunderstood it." 

Exp: "How does one misunderstand a deposit?" Freidl: "Someone must have told him nonsense. That is why we are sitting here. Simply because someone told nonsense. And just to the act against everything we have now standardized in the last few years, the entire communication." Exp: "What was this nonsense? Concretize the time." Freidl: "People may be mistakenly informed that they have invested in Lyoness. You cannot invest here. We are aimed at consumers. If a customer makes his down-payment because he thinks he makes an investment, it must have been due to wrong advice and for these cases we have always found a solution."

And:

"The vast number of Austrian Lyoness customers, namely around 95-96 percent, are shoppers, interested  only in price discounts on their own purchases. These customers use Lyoness often for many years to buy many products cheaper, and can, without paying and if they are interested, recommend our system to other customers. Concerning the possibility to make down-payments on vouchers, of which you say it is our true core business (selling payments on future purchases) - this is incorrect. The typical member of the Lyoness shopping community is not interested in building a sales team by recruiting new members, to gain a steady income. Our members are not obliged to recruit new members. 

Our business model has therefore - unlike is suggested - nothing to do with continuously acquiring new clients, who make these payments. We register all complaints and take due consideration of possible sources of error, as confirmed by our certification from TÜV Rheinland Cert GmbH and Quality Austria, who have independently tested our systems. These testing organizations noted, moreover, that we meet the requirements of certification according to ISO 9001:2008. ISO 9001 is an international standard that sets minimum standards to which the processes in a company need to live up. This is to ensure that customers receive the expected quality. At the same time, the management system should be subject to a process of continuous improvement. 

If the "Business Package" and our "campaigns" have been falsely presented by individual Lyoness members, that is not attributable to us. We have, as stated above, constantly tried to improve  the internal processes, presentation documents, seminar content, etc. Because of our size alone (the Lyoness shopping community counts now about 1.8 million members) we are limited in preventing at all times that individual members (without our knowledge and without our involvement ) are misinforming our new members, and abusing our information documents to do so. Contrary to the claims of the prosecutor, this has nothing to do with us deliberately designing our system in such a way that we could deceive our members."

This is of course nothing more than more of the same bullshit that was spread for years by the Lyoness racketeers. Although core-adherents may bear part of the (legal) responsibility for peddling the Lyoness fraud around the globe, the series of scams was thought out and executed according to a meticulous, devious plan by Lyoness and its instigators, just like they did before when operating GTS (Erin Trade) and Galvagin - and just like they will continue to do with their newest scams. Lyoness does not only make victims blame themselves for their losses, it also tries to make the adherents responsible for 'a brilliant idea gone bad' - which is of course a blatant lie. It was Mr Freidl himself who was caught on tape saying the Lyoness business model revolves around one thing only: 'positions, positions, positions, positions' - as well as instructing his followers that only down-paying members are relevant to sign up.