The Cosa Norda: The mafia behind Lyoness Scandinavia

Last Thursday, at 20.00 local time, the Danish public television channel TV2 broadcasted an in-depth exposé of the Lyoness racket and the people affiliated with it in Northern Europe (Scandinavia). As the episode is - to our knowledge - not (yet) publicly available to the general public (let alone with - English - subtitles), we will try to tell here what we know about Lyoness' presence in Scandinavia and the people behind its activities there.

The managing director of Lyoness Norway is a man named Terje Duesund. Duesund is anything but a fresh face in the world of 'MLM' in Norway. Together with his 'business' associate, Finn Ørjan Sæle (who reportedly learned his trade while visiting the US on a young age, from his 'mentor' Randy Gage), Duesund was responsible for the Norwegian division of the notorious MLM scam 'Nature's Own' (later, due to intense scrutiny, called 'Natures of Scandinavia').

MD Lyoness Norway: Terje Duesund

Nature's Own gained considerable publicity, and was heavily scrutinized in the Norwegian press for being an illegal pyramid scheme. Government authorities (mainly the Justice department) took a clear stand against the 'company', but were not sufficiently backed by their political superiors and the case stirred up quite some controversy. Well-known member of the Norwegian parliament Anita Apelthun (Christian Democrats - KrF), who reportedly also invested in the scam and propagated it (although she later claimed only to have used the products) - and was even accused in the public debate of trying to influence public prosecutors, is the mother of Sæle; Finn Ørjan's father - Finn Jarle Sæle - was an influential person in the Norwegian press; Norwegian minister of finance at the time, Gudmund Restad, reportedly had three daughters involved in Nature's Own.

In the end, the extensive investigation performed by the Norwegian Justice Department remained unused by the district attorneys with jurisdiction in this case. Nonetheless, the whole happening caused quite the stir in Norway and neighbouring countries, directors and distributors of Nature's Own were furious at the Justice Department for investigating their 'beloved company' and Nature's Own had to change its name to Natures of Scandinavia to escape all negativity. In its best days, the Nature's Own scam had about 600,000 members, most of which were believed to be Norwegians (coming from a country with 4,420,000 inhabitants in 1998). In 2002, the 'company' continued its activities (using the assets of Nature's Own) in the market of cell phone and internet subscriptions under the name 'PGOne'. This corporate structure was later integrated into 'Ventelo'.

Finn Ørjan Sæle 

Probably surprised themselves by the ease with which they got away with their crimes, Sæle and Duesund felt inspired to instigate a long list of follow-up scams in Scandinavia and beyond. According to the Norwegian Wikipedia, Sæle is currently 'leader' of 'ThinkSeven', another 'MLM', which does not seem toe exist anymore. He is also credited with founding and leading 'Zinzino' (from Sweden), which is an 'MLM' that imports store-quality coffee (Rombouts) and coffee machines from other European countries (particularly Belgium and France), and sells these products against an incredible and ridiculous price in Northern and Eastern Europe. This 'company' has met severe scrutiny in (at least) Sweden, Finland (where Zinzino has received television coverage) and Estonia. In Sweden, 'Zinzinotruth' has made considerable, excellent efforts to expose this racket. Nevertheless, the founders of Zinzino are planning on taking their racket to the US.

Other rackets either Sæle or Duesund have been involved with include Spinglo/Synkronice, SaferWaver (preying on the fear of people for all sorts of radiation), Bewell and DailyPoker. Also, the other racket discussed in the TV2 documentary, 'Kyäni' (supposedly American), boasts a book called '12 ways/steps to success with Kyäni' - when analysed, the Danish journalists came to the conclusion that this is the exact same book that was pushed by Nature's Own in 2003. In other words, many of the scams present in Scandinavia revolve around the same people, and most of the scams popping up in Scandinavia seem to be instigated and promoted by either Duesund or Sæle, or people that can be linked to them (like Peter Jakobsson in Sweden and Lyoness member Jimmy Larsen from Denmark).

For more information on MLM scams in general, please make sure to check David Brear's excellent Blog: http://www.mlmtheamericandreammadenightmare.blogspot.com

The TV2 episode can be watched here. Later, we hope that someone will publish the episode somewhere else, in order to make it available to a wider, non-Danish public.

FlexKom: the new Lyoness?

As more and more of our readers understand and accept that Lyoness is a pernicious lie, designed to scam millions of consumers and small and medium sized enterprises out of billions of euros, we are asked with an increased frequency what we think of other 'companies', operating similar 'business models'.

From the very start of the Complaint Centre, we have decided that our focus lays primarily on Lyoness. Whilst acknowledging that there is a long list of similar frauds operated at this time (usually with a differing disguise), we also acknowledge that others, with more experience and more knowledge on the subject, are better suited to provide a comprehensive overview of this type of scam. Therefore, for a full overview of the phenomenon of income opportunity racketeering, we would like to refer our readers to the excellent Blog of Mr David Brear.

However, every now and then a scam pops up and catches our attention, because it is just so darn similar to Lyoness. FlexKom is such a scam.

We have reported earlier that we expect the racketeers behind Lyoness to come up with a new front for their never-ending scam, much in the way like they have dealt with the problems faced earlier by GTS and Galvagin, which eventually produced Lyoness. From that perspective, we are inclined to investigate and report about scams that operate in a freakishly similar manner as Lyoness, with a near-identical disguise to cover up the fraud.

More and more readers have recently brought FlexKom to our attention, and have directed us to on-going debates on various internet fora (2, 3, etc), as well as social media, about FlexKom. For the readers who are unfamiliar with this name, we will provide a brief introduction of the 'company' below.

FlexKom is a 'company' founded, allegedly, in 2010, by either Cengiz Ehliz and/or Asker Sakinmaz, which are both presented as current CEO of the 'company', most probably because they are supposed to represent different divisions of the 'company'. It claims to be some sort of a franchise provider, supplying its partners (which pay about 1500 euros for a 'gold package') with the right to enrol shops into the network, sell them the special FlexKom machines (for about 400 euros), which functions as a reader for the FlexKom cards. The enrolled shops then have the right to issue FlexKom cards to their customers, with the promise that the cardholders will get discounts on their purchases at FlexKom-affiliated shops, and the shops are promised a percentage in commission over the purchases made by the cardholders at every FlexKom-affiliated company. Naturally, the earnings exponentially increase as soon as new partners and shops are brought in.

FlexKom, founded by people with a seemingly Turkish background, chose Turkey as its 'test-market', to see whether the system would function the way it was expected to. According to FlexKom, it did (which is why a long list of countries have now been 'opened' by FlexKom; i.e. FlexKom partners can now be signed up there). According to the Turkish partners, media and authorities, it did not.

We found it quite interesting to see that so much vagueness exists about this 'company', which self-reports to be an extremely reliable business partner. For instance, we have seen claims that this 'company' operated an MLM-system, as well as fanatical debates where FlexKom denies to have anything to do with MLM. The company appears to be Turkish, but is most often claimed to be from Germany - yet is registered in Switzerland. Also, many of the national divisions, presented as if they were incorporated and registered at the local chambers of commerce, are not findable in the company registers of these local chambers of commerce.

Both Cengiz Ehliz and Asker Sakinmaz are not officially attached to the Swiss corporation registered under the name 'FlexKom International Holding AG'. Instead, the two names currently attached to this holding (as managers and founders) are Hasan Süslu and Guido Gmür. About Süslu, nothing much is publicly available. About Gmür, however, one can find a little bit more. According to Moneyhouse, Gmür has worked for about 13 companies, amongst which is First Tax AG, registered on the same address as the FlexKom headquarters. Observant readers may remember that this is the company of which Lyoness co-founder and tax and bankruptcy expert Iwan J. Ackermann is the co-founder and CEO.

As we have argued earlier, the people behind Lyoness have previously been responsible for organising GTS (Erin Trade) and Galvagin - at least - and apparently managed to get away with running those scams by setting up shell corporations in various countries and moving assets around until they were no longer traceable for anyone looking for them. As it seems, this is the way they have managed to found Lyoness without anyone frowning upon the intentions of the Lyoness founders.

We understand that we should be cautious in what we write here, as the exact details and sequence of events are difficult to mimic, mainly due to the lack of information publicly available. However, it does look an awful lot like the same people that managed to transfer Galvagin into Lyoness, and continue their scam under a different name, are now in the process of doing the same for FlexKom. It definitely looks like FlexKom being the long-awaited successor of Lyoness, through which the people behind Lyoness can continue to the scam the world. If not, FlexKom is an extremely similar copy (again, there is 'cash back', the higher ranked adherents become first 'leaders' and then member of the 'President's Team', etc.) of the Lyoness racket and the people interested in running the FlexKom scam at least appear to have hired the same people to cover up their fraud.

American managing director of Lyoness convicted fraudster?

Follow @antilyoness

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.

Lyoleaks #2: Lyoness: 'the MLM redemption'?

Recently, the Complaint Centre has been publishing material made and/or spread by high-ranked (former) Lyoness representatives, such as 'Dr.' Rik Wahlrab, highest-ranked Lyoness member in the USA and Mr Craig Wotton, former professional golf player and former managing director of Lyoness Australia.

At first glance, all Lyoness propaganda we have found seems identical, yet when subjected to a closer examination, some differences surface. The most prominent one is that most Lyoness propagandists speak of 'Network Marketing' or 'MLM' when describing the 'business model' of Lyoness, yet the highest-ranked member in the USA, Wahlrab, of whom we think it's fair to expect that he's acquainted with the 'business model', refutes the idea that Lyoness has anything to do with 'MLM' and/or 'Network Marketing'.

In fact, Mr Wahlrab and his 'team' have been spreading propaganda videos and other documents amongst their downline in which they explicitly state that and why Lyoness is absolutely no 'MLM' or 'Network Marketing' company. Here are the arguments they provide for this statement:

The video in which Mr Simsby explains this in further detail, as well as more propaganda and instructions spread amongst American Lyoness members, can be found here:

http://vimeo.com/channels/iappreciateu/56255094 (look for the video 'MLM vs Lyoness')

The just of it all is that Lyoness has at least 13 major advantages over 'MLM' and 'Network Marketing' systems, which, according to Simsby, are 'broken' and 'are only surviving because they have enough workforce to continue adding new members to compensate for the drop out rates'.

While none of that surprises us (given the reputation of 'companies' operating 'MLM' systems) it is quite awkward - to say the least - that a 'company' that claims that its global expansion thrives on the mere concept of replicability, has to sell its 'excellent, unmatched shopping community' under different names and in different disguises in the different countries it operates in.

This is a video spread amongst Lyoness members in other countries than the USA:

Additionally, in all the propaganda material we found and published, as well as in our conversations with non-American Lyoness members, Lyoness is referred to as being 'MLM' or 'Network Marketing'. Some of the propagators have even spread videos detailing what 'Network Marketing' is, why it is the way to 'financial freedom' and why Lyoness is a perfect example of this system. Some of them have instead coined the term 'recommendation marketing' to refer to Lyoness, but according to them, that is 'a distinction without a difference' - used to move the attention of the audience away from the negativity circulation on the Internet about 'Network Marketing'. As regular readers of this Blog may remember, Lyoness members are generally recommended urged to avoid mentioning (next to the term 'Lyoness') 'Network Marketing' or 'MLM' in their contact with new prospects, until a member of the upline is present.

At this point, some of the readers of this Blog may be interested to learn whether we think Lyoness is 'MLM'/'Network Marketing' or not. Our answer is that it does absolutely not matter what we call Lyoness. Lyoness, its instigators and core-adherents have been - and are - operating a pyramid scheme, with related Ponzi schemes and other (advance fee) frauds.

We also know that Lyoness propagators have trained their followers to lie and deceive, and to tailor the lies and deception so that it fits your target audience. This process of tailoring can take place on the level of an individual prospect, but can also be expended to a wider audience, like for instance an entire country or continent.

Except for a some specifically-targeted subgroups, for instance comprising new citizens, everyone in the USA seems to be pretty familiar and fed up with the system sold as 'MLM' or 'Network Marketing', whereas the rest of the world is less experienced in this area. Thus, except for sheltering unprepared prospects from these terms, in the USA, Lyoness has made an extreme effort to avoid association with these terms, even within the organisation and the propaganda material intended for meticulously-brainwashed adherents.

It should be noted that no matter how a fraud is named, disguised or dissimulated - it remains a fraud at any point.

David Brear: Hubert Freidl's 'Lyoness Income Opportunity' lie has not been tested and approved!

English author David Brear has today published an excellent article on Lyoness, its certificates and the certification agencies responsible for granting these effectively-worthless, and highly deceptive certificates:

The continued use of 'quality certification' by the 'Lyoness' racketeers, to commit fraud and obstruct justice around the globe, is brought to the attention of the certification companies, Quality Austria and TÜV Rheinland.

http://mlmtheamericandreammadenightmare.blogspot.com/2013/06/the-lyoness-income-opportunity-lie-has.html

http://mlmtheamericandreammadenightmare.blogspot.com/2012/09/lyoness-is-lie-and-hubert-freidl-is-its.html

http://mlmtheamericandreammadenightmare.blogspot.com/2012/09/lyoness-has-exhibited-universal.html

Lyoleaks #1: Lyoness' corporate instructions on deceiving people

Few readers of this blog will be surprised to read that it is the opinion of the Lyoness Complaint Centre that Lyoness recruits people into its schemes with false promises of great wealth, and trains them to do the same to their friends.

In fact, Lyoness is part of a much wider, and evolving, phenomenon which David Brear has studied over many years. Consequently, he has been able to identify Lyoness in accurate terms as 'a classic example of a corporate front for a self-perpetuating, blame-the-victim, cultic racket comprising a dissimulated closed-market swindle (or pyramid scam) - and related advance fee frauds (comprising peddling victims of the pyramid scam, a progressively-expensive, but fake, 'plan to achieve a future, secure, Utopian existence') - based on the crackpot pseudo-economic theory that:

Endless-chain recruitment + Endless payments by the recruits = Endless profits for the recruits'.

Following that logic, anyone who gets persuaded to join Lyoness is from the very start instructed to do two very important things:

a) Make 'down-payments' (i.e. investments) into the Lyoness system

b) Recruit as many as possible others to make similar investments

Like in many scams, this principle is sold by telling the adherents of the scam that they will only succeed if they duplicate exactly what others (who are allegedly successful and wealthy due to the scheme) have done. This duplication always involves investing (no matter in which way it is disguised) and recruiting people who will also invest.

Of course, Lyoness and its adherents do their utmost best to make sure this principle stays internal and does not become known to the general public. However, sometimes something leaks out. In this case, it is a video made by an Austrian kite-surfing guy calling himself Dr. Julian Hosp (although any evidence that he is in fact a scientific or medical doctor is lacking).

Hosp claims to be a 'level 5 leader' in Lyoness, who has definitely 'made it'. Now, as a favour to all of us, he teaches us (especially people from Hong Kong, Lyoness' new 'growth market') how to do exactly what he has been doing to get so darn wealthy. We will be publishing more of his videos here shortly, but we could not wait to show the world this one, as it captures the clear-cut  instructions that Lyoness members get about how to deceive people into investing in Lyoness.

  We have taken out the most interesting parts and prepared our modest analysis for our readers.

---

Right from the very start, Mr. Hosp emphasises the income cycle of Lyoness. You join, you pay, you contact people to do the same and you will become rich. The first someone who has just joined should do is make a list of everyone he/she knows and add all possible contact details to the same sheet. 

Although such a list is a very private document by its very nature, Lyoness urges its newly recruited members to hand over the list to the 'recommender' and let the 'recommender' handle - at least - the first few presentations. These first few presentations, according to Mr. Hosp, should be with the so-called 'warm contacts', meaning the closest social contacts a person has, like your best friends and closest family. Lyoness feels that not everyone will be enthusiastic from the start, and has therefore developed a systematic, duplicable approach of how to treat new contacts and prospects. It all starts with establishing the contact. 

Honesty, as it turns out, is not a key-component of (the first phase of) this approach:

"Whenever you contact them, you only have one goal. And that goal is: getting a meeting. It does not matter how you get that meeting. Be creative and flexible; tell them you have a surprise for them, tell them you wanna go for a drink, tell them you wanna go for a coffee. The only important goal is: you wanna set up a meeting."

And the company name, which is so successful, endorsed by so many and opens doors everywhere around the globe, is also not very popular at this stage:

“Never mention Lyoness, never mention anything about saving money. The maximum you can say is an opportunity to make money. We are not looking for savers at the moment; we are looking for business people.”

So, what they are telling us is that people looking to save money have no place within the 'shopping community' Lyoness? Interesting - and it sounds familiar. Didn't Freidl say something to the same effect when he was unaware of being filmed?

Thus, as pointed out earlier, the 'cash back card' is indeed nothing more than a form of 'bait', used to gain access to you, your contact details and the contact details of 'at least 25-30, but preferably 100-200' people you know. Maybe that explains why so few people actually shop through 'shopping community' Lyoness? 

Approaching 'warm contacts' (i.e. your closest social connections) is to be prioritised in the early stages of a Lyoness membership, always with your 'recommender' present, though:

"There are two different approaches; the direct approach and the indirect approach. The direct approach means that you can only do it with very close people – people you would meet anyway; people that cannot evade you. Now with everyone else you use the indirect approach. You need to tell the other person, why you are calling them. You should never mention Lyoness, saving money, or that it is a network marketing business. Always mention that you do this with a friend, a business partner, so there is some peer pressure."

So, in short, preferably try to recruit people that 'cannot evade you' and use 'peer pressure' to enroll the rest. We at the Complaint Centre would hereby like to nominate Lyoness for the award of most ethical company of 2013! 

Mr. Hosp also deems it important that we view (and recommendably use) his template for approaching new contacts:

No matter how excellent his work truly is, there is always a chance that the approached prospects will annoy you with their tedious, irrelevant questions, such as:

- What is the meeting about?

- What's the name of the company?

- Can you send me some info upfront?

Luckily, Lyoness offers you a way out:

"Annoying question number 1 is: 'what is this meeting about?'. I always tell them 'look, the company is still very small, we don't have a website yet'. That is of course not true, but that does not matter."

And:

"We are very small still, we are just growing, we are in the start-up phase. I cannot give you much more details, but I will introduce you to my business partner, because, well, I do not want to do that alone. I hope you respect that - we always do that together."

Written info is not very popular either:

"If the person asks” can you send me some info”, you say “no, we do not have any written info yet, it’s just the concept of it and I want to explain it to you."

Getting a meeting is very important and any obstacles possibly stand in the way of arranging one should be removed:

"The important thing is, never forget, it is not about telling the exact 100% truth. It is just about meeting the other person. And if you tell them you just want to go for a drink, you just want to introduce them to a new friend of yours, you can just introduce them to the business."

Doesn't that just warm your heart? 

Basically, it is to be recommended to avoid unexpected, unprepared discussions of Lyoness. The business concept is best explained by someone with a little more experience (i.e. 'an upline') and should always be scheduled. However, Mr. Hosp does not deny the possibility that you run into someone who could turn out to be a prospect (that's because: everyone is a prospect!). 

Naturally, a method was developed to deal with such situations as well. Let's call it an 'elevator pitch'. How it works is that you run into someone who asks you what you do for a living. As you have been taught, you should under no circumstance mention 'Lyoness' or 'Network Marketing'. Instead, lie briefly and then put the ball in their court:

We at the Complaint Centre are particularly fond of the 'XXX' sections in the template. Which compliments will be given to you, will be decided on the spot. Improvised sucking-up, always pleasant...

"Be natural! You can also say the name, if the other person needs it, cause if you hesitate too much, it will be strange".

Finally, we get to hear a name - maybe we were wrong about the ethics of Lyoness...

"Maybe just change the pronunciation into 'Lion' or similar ;-)"

OK, I guess we weren't. 

It is very important that the recruiter is totally prepared for the eventual meeting, and the prospect is not (understandable, for which fully-informed, rational person would consent to this?). Using Google, written info, actual names, websites - it is all to be avoided. 

Does not it show that Lyoness has a certified management system?

"And this is the key, because I want to push the ball back, so the other person has to say what he is doing, and I’m telling you 95 % of the times he is not happy with his or her job, so I say “wow cool, sounds great, listen, we are always looking for competent people and you are very charming, so upfront, etc. [or: XXX], so maybe it would be interesting for you to see how our company works and make some money on the side"

And then of course there is the invitation for coffee, a drink or to meet a new friend. Remember, the helpless old woman you lie to today, may just turn out to be your country's 'leader' of the future!

It is also important not to scare off new prospects with the complexity of the Lyoness systems. In fact, never mention that it is difficult to explain, or anything to that extent:

"I never try to say 'this what I do is very hard to explain', because it’s not. I am setting up a business, so I am very natural and you should be too. Never mention the name - don’t try to do it,  never say that you have a website, never say you can send them some info upfront, you always want to meet the person. Remember the goal!"

Thus, the end justifies the means. Indeed, we can see how the great discounts and amazing average earnings justify selling your friends and family (and their contact details) and blatantly lying to them, as well as to any stranger you might run into. 

Knowledge is power, everyone knows that. Therefore, gather as much intelligence as you can on the people you are trying to recruit (which may come in handy when filling in the blank spots in the templates of deception).

"[It is] very important, [to] collect some info about your friend, your prospect. If you know that person well, that is very simple. But if it’s a new person, someone you haven’t met for so long, it helps to understand what the person is into. This will help you to pitch your idea better, provide a solution for the other person’s problems. Never forget your goals. The goal of the contact is – you want to meet that other person, that’s it."

And does not that fit perfectly into the idea of a business that can only grow when you 'help each other' and that employs the slogan 'together we are strong'? 

So much for the preparation, now we're moving on up to what it is all about - our one and only goal: the meeting:

“You have three goals in a meeting. To interest and excite the other person, and to register that person as a new member. And then: schedule a follow-up meeting!"

Huh? The prospect already became a member of the shopping community, yet we need to meet with him/her again?

"So you will talk to people, inform them, excite them, register them, and then schedule follow up meetings – you will have your premium members."

Ah, we see. It is all about the paying members.

"This success cycle of making personal contact, setting up meetings, scheduling follow-up meetings, going to the business infos , going to the Lyoness days. This cycle is what your success in Lyoness depends on. The faster you can go through this, and the faster you can teach others to go through this, the faster you will walk up the career ladder."

Let's make sure we got this straight. We join, we throw our card away and pay for vouchers instead. We then approach anyone we have ever met or see on the street for a secretive meeting, with an illustrious, mysterious business partner - for a company of which we cannot tell the name (or at least not pronounce it so accurate as that they will be able to Google it), we cannot give out any written info, nor provide them with the company website. If the meeting goes well, we immediately schedule another one where we convince our new prospect (which it still is, because nothing has been paid yet) to down pay on vouchers which will miraculously multiply in value if he/she will just do the same. 

So we are recruited and we pay, then we recruit people and make them pay, we teach those people to recruit new people and make them pay too, etc., etc., etc. To quote Robert Herjavec: 'Isn't that a pyramid scheme?'. Just like Andy, Mr. Hosp has a problem with 'that nasty P-word'. He prefers the terms 'career ladder' and 'system cycle'. Have it your way, Mr. Hosp.

"There are certain things you cannot do as a Lyoness member"

We are truly amazed, for we just heard an open appeal to lie and deceive as much as possible…

"You are not allowed to do public announcements on Lyoness. You are not allowed to go in front of the Pizza Hut or a Pacific Coffee and talk to employees or talk to other members about Lyoness. You are not allowed to do that. Your goal is to talk to your friends, family and, of course, people that you meet, but not at any loyalty merchant, and introduce them together with your up line in a proper way to what Lyoness is about, how to save money, and more important, how to make money."

First we should note that we appreciate the honesty here: finally it's admitted that making money is way more important than saving money. Probably a good slogan for the next marketing campaign. 

More surprising, however, is the prohibition of discussing Lyoness anywhere near a 'Loyalty Merchant' (those are the companies that 'publicly endorse Lyoness after a thorough check of all its systems by their comprehensive and immense legal departments'). This seems a little strange, but we have a theory. Could it have anything to do with the fact that no-one affiliated to those Loyalty Merchants has ever even heard of Lyoness? Perhaps they would not like you to find out about that, as it could endanger the magic cycle of success...

"It’s your responsibility to build a successful team. You don’t just look for people, you give them an opportunity and you will find key members. You will make your first money as soon as you have your four premium members. And then it’s our goal to get you to career level three in the first month."

So no money, if no recruiting? Quelle surprise... For your information, these premium members are only valid if they have at least one 'accounting unit' (or 'position', or 'point', whatever term is the most difficult to find information about on Google). In other words, unless your directly brought-in people have shopped for an incredible amount of money in a very short time (which would be unique), they are going to need to make a down-payment in order to be lucrative to you. And if you haven't down-paid yourself, they are worth nothing to you either (except for maybe 0.5% of their average annual expenditures at the affiliated merchants). 

To reach 'career level 3' - which should be doable in one month, you're going to need to recruit 'approximately 13 premium members' as you need '500 points' (units) in your 'lifeline'. This means you need to attract 13 x 2,000 = 26,000 euros in down-payments.

Now it all makes some more sense, now doesn't it? 

The cycle of success consists of paying, recruiting, paying, recruiting, etc., etc., etc. Indeed, that nasty P-word is just so inapplicable...

Freidl's crumbling pyramid: an update

Readers of this blog are probably aware that the Lyoness scam is collapsing as we speak. Additional to the rising level of media coverage over the last couple of months, more and more victims are realising that they have been scammed and start demanding refunds, filing suit against Lyoness and its instigators and/or filing complaints with the appropriate authorities, which in return also start investigations and court cases.

Today, it became known that in Sydney (Australia), a group of Lyoness victims has filed a class-action law suit against Lyoness Australia. Earlier, it was also reported that the Australian ACCC has started an investigation of Lyoness, mainly due to Woolworth's announcement that they are not and do not want to be a partner of Lyoness.

http://mlmtheamericandreammadenightmare.blogspot.com/2012/09/lyoness-is-lie-and-hubert-freidl-is-its.html

Another accelerator of the collapse of any pyramid scheme (and Lyoness in particular) is the surfacing of quantifiable evidence that shows that the company's business model is flawed (to say the least) and that the promises they make are unrealistic and factually untrue.

Yesterday, this blog listed a significant amount of quantitative evidence in the form of income data of members of Lyoness America. Like most numbers reported by this blog (for instance the calculations of the average discounts), they were cited and discussed on several forums. The following excerpt of a forum discussion of the income information published yesterday, should give the readers of this blog an idea of how Lyoness (and its deluded adherents) deals with argued criticism.

In the above screenshot, well-known Lyoness propagator on the German-languaged consumer forum 'Verbraucherrunde' by the name 'seemaster', questions the source of the information (or 'nonsense' as he calls it) - something he and his fellows never do when it concerns Lyoness propaganda.

Unfortunately for 'seemaster', the information published by this blog came straight from the official Lyoness website (pdf) and is part of the official Lyoness America income disclosure statement 2012, which specifies the available income data for all Lyoness America members over 2012. Although not publicly spread, Lyoness has gathered this information itself. According to Lyoness an income disclosure needs to be shown to prospects before they sign up, in order to comply with the relevant regulations in the United States.

When the intelligent Lyoness opponents active on this forum tell to 'seemaster' that the information is the most current data available, coming from his most-trusted source 'Lyoness' itself, 'seemaster' has to employ a different technique. He/she starts posting completely unrelated propaganda in a desperate attempt to a) shelter the information from uninformed readers of the forum (i.e. doubting prospects) and b) to switch to a more favourable discussion in which he/she has more chance of winning.

Particularly the graph 'seemaster' posted is interesting, as that represents exactly the opposite of the point 'seemaster' is trying to make. The graph is not an unknown way of promoting Lyoness; many presentations and Youtube clips constructed by the Lyoness instigators or deluded adherents feature a version of this graph. Although it is supposed to represent the 'incredible growth' of Lyoness as a company in terms of Lyoness memberships, it in fact illustrates the crumbling state in which the Lyoness pyramid scheme is located.



A lot of criticism can be expressed concerning this graph. For instance, it is unclear how high the number of memberships actually is at a certain timepoint and it is of course a preposterous assumption that Lyoness will grow to 5 million memberships in such a short (yet unspecified) period of time. This merely constitutes a deceptive lie designed to convince doubting prospects to sign up for Lyoness as they will have a fair chance at recruiting enough new victims to make an incredible amount of money. Especially the part that after September 2012 (i.e. the forecast part of the graph) the number of memberships suddenly grows with a lot steeper rate than it has ever done in reality, is very interesting.

The reality is that the number of Lyoness memberships has indeed grown over time (quite essential when running a pyramid scheme), but that the most interesting conclusion from analysing the membership growth numbers is that the growth rate has considerably stagnated over time.

Year	Members	Change
2008	310,000	-
2009	520,000	+67.7%
2010	980,000	+88.5%
2011	1,700,000	+73.5%
2012	2,200,000	+29.4%
2013	2,700,000	+22.7%

http://de.wikipedia.org/wiki/Lyoness


As can be seen from the table, the incredible growth rate of the number of Lyoness members has considerably decreased over the last few years. This probably explains why so few people make any money with Lyoness, as in a pyramid scheme, you need to keep achieving a higher growth rate in order to satisfy the investers that joined earlier. Also, it shows that the 'short-term goal' of achieving 5,000,000 Lyoness members is a ridiculous and preposterous statement, and in fact nothing more than a blatant, deceptive lie.

What is more likely to happen shortly is that the Lyoness scam finally collapses, either because it gets forbidden in host-country Austria, or because the scheme collapses as the capital flows dry up because members are having a hard time recruiting new victims.

Thanks, 'seemaster' (and Lyoness for making the graph) - you have made our point that the Lyoness pyramid is crumbling even clearer!