South African media identify the Lyoness racket

All over the world, Lyoness seems to be losing grip on their once glorious monopoly of information. After their counterparts in Austria, Switzerland, Germany and Denmark, the media in South Africa have now also noticed the Lyoness racket (which has been active in their country since 2011) and describe the problems the 'company' faces in Europe, particularly in their home countries Austria and Switzerland.

The South African Sunday Times wrote that Lyoness is under intense scrutiny in Austria (with at least 300 members demanding their money back, investigations by government authorities, and the losing of a considerable number of court cases against dissatisfied members), yet also described the situation of Lyoness in South Africa.

Like everywhere, the major retailers that are paraded around by Lyoness to persuade people to join in and make down payments on future purchases (based on the severely flawed logic that these retailers have 'big legal departments' that must have 'thoroughly examined Lyoness' business model before agreeing to become a partner of Lyoness', and therefore Lyoness must be a 'legitimate business opportunity'), when confronted with reality, state that they have not examined Lyoness, are not a partner of Lyoness, and most certainly do not endorse its business model. In South Africa, the most relevant cases of such companies are the four large retailers Woolworth's (like in Australia), Foschini Group, Pick n Pay and Dis-Chem, which state they have only sold large amounts of discount vouchers/gift cards to Lyoness, and furthermore have no idea of how the 'company' operates. After being informed about that, these companies indicate that they will stop selling their gift cards at bulk, and will not do business with Lyoness again.

When confronted, Lyoness' managing director of South Africa, Gerhard Buckholz, lies through his teeth and claims that any negative information available about the 'company' must have been derived from the information spread by its members (who possibly did not understand how the 'company' works), and that the vast majority (96.5%) of Lyoness' 30,000 members in South Africa are 'normal shoppers', with only 3.5% being premium members - according to Lyoness, this matches the pattern that is seen in the 'company's' global operations; Lyoness claims that worldwide, less than 5% of its members have purchased a unit in the 'company's' position system.

As regular followers know, Lyoness has tried to seem legitimate in many ways, for instance by pretending affinity with South African hero Nelson Mandela (by donation some of Lyoness' stolen capital to charities tied to Mandela).

Megan Power, consumer rights journalist for the South African Sunday Times, tells CNBC South Africa/ABN Digital that based on her investigations and her knowledge of the matter, she is convinced that the Lyoness 'shopping community', has a 'secondary purpose' - most likely meaning it to be a pyramid scheme in disguise.

South African medium Rapport also reported on Lyoness, comparing it to notable earlier pyramid scams that have been operated in South Africa like 'Masterbond' and 'Sharemax'. The article addresses nicely how Lyoness is presented as a mutually beneficent shopping community, but that the true nature of the company revolves around the payments of its members into the position system of Lyoness, in which people should buy themselves in for RS20,000 (or any other equivalent of 2000 euros), for the expected reward of RS200,000 (which according to attorney Eric Breiteneder, no-one so far has received). Luckily, the main character in the article, Mr Bredenkamp, and his wife, decide (after some searching on the internet) not to join Lyoness.