The Lyoness Myths #8: Only 30-35 people are unhappy with Lyoness

The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

When asked about the persistent and rapidly increasing controversy surrounding his 'company', Hubert Freidl stated confidently that out of all those millions of happy Lyoness members, maybe 30 to 35 had some minor complaints about the impeccable services provided to them by Lyoness.

Anyone who has been reading about the latest developments in the Lyoness case at any of the many well-informed sources reporting on these developments will understand immediately that this statement constitutes a blatant lie, which serves to keep the millions of (often unwitting) victims calm. Looking at the Income Disclosure Statement of Lyoness Americas, it seems more plausible that 30-35 people (out of the 3,000,000 members) are not unhappy with Lyoness.

In Austria, Plattform Lyoness has reported recently that by now, 500 people have contacted them and stated that they feel scammed by Lyoness and want their money back. This number grows steadily. Additionally, the Lyoness Complaint Centre, that's us, has reported earlier that in Australia, a considerable number of victims has applied for refunds and examined the legal possibilities to force Lyoness to pay back their investments. Several of these people have already taken action in this respect.

In the mean time, Freidl and his companions keep up the happy face, continue smiling and lying to everyone who is willing to listen and buy themselves enough time to get away with their criminal acts - and start working on new ones. Anyone who buys that 'only 30-35 people are not completely happy with Lyoness', must really think very hard why on earth they would believe that. Perhaps, the Lyoness racketeers have had more influence on their thoughts than they'd care to admit.

In line with the appeal launched by Plattform Lyoness, the Lyoness Complaint Centre would like to, once again, emphasise the importance of filing your complaints with the appropriate (local) authorities and contacting an independent intermediary for advice. Also, tell your story and spread the truth!

The Lyoness Complaint Centre can be contacted using the comment section below. Please, indicate whether the content is intended to be published or not. Contact details will never be disclosed or published.

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

Apple and Lyoness: a partnership between equals?

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The severely deluded Italian woman (Giulia) who has been spamming the excellent blog of David Brear with her thought-stopping, mind-numbing nonsense, raised in one of her last masterpieces of cultic propaganda the point that big companies like Apple are a partner of Lyoness, therewith referring to the ridiculous argument that major corporations endorse the Lyoness business model.

Earlier, this blog reported about the Lyoness instigators and adherents using the deceptive argument that Lyoness is (explicitly) endorsed by major corporations (and certification agencies) with big, experienced and thorough legal departments. This argument builds on two condemnable assumptions (both largely untrue). First, that major corporations care whom they do business with - which is especially questionable when it concerns redundant, irrelevant and unimportant business such as discount vouchers or even gift cards. The second assumption is that the major corporations that have their name and logo featured on the Lyoness website and PowerPoint slides have actually done business directly with Lyoness - and therewith are aware of who and what Lyoness is and what its system comprises.

Readers of this blog will know that this is not true (or at least in most of the cases). Big companies like Spar, Carrefour, Microsoft and Lego have already declared not to have done business with Lyoness directly, but that their gift cards and/or discount vouchers have been sold to Lyoness by third parties. Another way in which Lyoness has established 'partnerships' with big companies is by joining affiliate programmes. It is preposterous to assume that the companies benefiting from such affiliate programmes (by an undoubtedly increased number of sales, and therefore turnover and profit) will check very thoroughly whom they are doing business with, especially whether they are hiding an obvious pyramid scheme (and related scams) behind their innocent facade of a 'shopping community' that receives discounts.

In case of the 'partnership' with Apple, the same logic seems to apply. Apple runs an affiliate programme in which pretty much any reseller can participate (as long as their website works and does not contain objectionable material, such as explicit language or content, or support for violent or discriminatory groups). The commission for the Apple affiliates is 2%.

Coincidentally, Lyoness offers a 2% discount on the products of the Apple Store. As Freidl needs to eat too, only 1% flows directly back to the Lyoness member; the other percent disappears in the pyramid scheme that Lyoness operates as the 'position' or 'unit' system.



Conclusion: there is no evidence to support that Apple endorses Lyoness, and it is highly implausible that this is the case. The far more likely explanation is that Lyoness joined the Apple affiliate programme.

For everyone considering to join Lyoness to buy the newest Apple gadgets there is another disappointing announcement on the Lyoness website:

"Please note that the new IPad(Retina Display), iPhone5, new iMac and IPadmini are excluded from remuneration."

In other words, Lyoness members do not get a discount when buying any of the newest Apple products, but are stuck with the option to buy the outdated versions (i.e iPad 2, iPhone 4) with a meager 1% effective discount (calculated before VAT). Wow!

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The Lyoness Myths #7: Warren Buffet believes in Lyoness

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

Recently, English author David Brear wrote an excellent, copyrighted article on how income opportunity racketeers use wealthy billionaires as a legitimation of their nonetheless illegal activities. For many scams, it has been reported that victims have been enticed into joining by claiming that famous rich people as Donald Trump, Robert Kiyosaki (who?!) and even one of the wealthies men on earth, Warren Buffet think 'network marketing' is 'the perfect business'.

Until now, there had not been any explicit evidence that Lyoness promotors (i.e. instigators and deluded adherents) had been using this bogus argumentation to dupe new victims through the Lyoness scam, until deeply deranged Italian woman by the name of 'Giulia' contacted David Brear and left a thought-stopping and most disturbing comment.

For more information and outstanding background analyses on the phenomenon of income opportunity fraud, see: http://www.mlmtheamericandreammadenightmare.blogspot.com

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The Lyoness Myths #6: Lyoness is endorsed and certified by renowned institutes

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

According to the people who will try - or have tried to sell you the Lyoness dream, the Lyoness system is not only endorsed by an incredibly long list of amazingly popular companies and their impressive legal departments, but also by several renowned institutes that have provided Lyoness with a few certificates.

At first sight, these certificates may seem impressive. Quality Austria AG, indeed a renowned Austrian certification agency, has issued Lyoness an ISO 9000 series certificate (ISO 9001:2008).

This certificate is aimed at providing interested people with information about the 'quality management systems' of the companies that have been through an assessment procedure by an official provider of ISO assessments, like Quality Austria. So, the fact that Lyoness possesses an ISO 9001:2008 certificate, means that Quality Austria has decided that, based on the criteria drawn up by the International Organization for Standardization, has a decent quality management system.

What does this comprise? The ISO itself says the following about the ISO 9001:2008 certificate:

"ISO 9001:2008 specifies requirements for a quality management system where an organization

•needs to demonstrate its ability to consistently provide product that meets customer and applicable statutory and regulatory requirements, and

•aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements.

All requirements of ISO 9001:2008 are generic and are intended to be applicable to all organizations, regardless of type, size and product provided.

Where any requirement(s) of ISO 9001:2008 cannot be applied due to the nature of an organization and its product, this can be considered for exclusion."

When one assesses the concrete criteria (translated into plain English) which a quality management system needs to fulfil in order to be certified, one runs into such criteria:

"Identify the unique requirements that your customers want you to comply with."

and:

"Measure your organization's product characteristics".

That is about as close as the criteria get to effective value for the consumers and small and medium-sized business owners that are considering becoming a Lyoness (premium) member. Effectively, the ISO 9001:2008 comprises nothing more than the establishment of a system that measures and documents the processes within the organisation(s). What the actual outcomes are, is irrelevant for the obtaining of such a certificate. This makes the document almost completely irrelevant for people considering to join Lyoness.

Or, as Dilbert says it:

Secondly, there is the certificate issued by TÜV Rheinland. Indeed also a renowned certification agency. And yes, the certificate looks just as impressive as the ISO certificate.

And: http://www.certipedia.com/quality_marks/9105061030?locale=en (Thanks, anonymous reader who provided us with this copy).

TÜV seems to be in the same line of business as Quality Austria, issuing management certificates which assess whether their is a management system in place and whether this management system meets the applicable requirements. Which requirements need to be fulfilled, depends on which type of certificate is requested.

In the case of Lyoness, a special certificate was drawn up, namely one that certifies that the Lyoness system consistently pays back 'cash' in the form of discounts on purchases made by members of the organisation. This was never the controversial part of the Lyoness system. The obviously illegal parts of Lyoness, e.g. the position system, the advertising campaign investment schemes, etc. were not looked at by TÜV - or at least not certified. The only certified statement is 'cashback with every purchase', which is indeed true (until the scam collapses of course). The amount of cash back is insignificant and nearly no-one uses the discounts, but it's true. Nevertheless, this is an absolutely redundant and irrelevant piece of 'evidence' or 'information' for anyone who is considering becoming a Lyoness premium member (at least around 90%).

In conclusion, both Quality Austria and TÜV Rheinland have not certified the relevant (controversial and illegal) parts of the Lyoness business model and the certificates are therefore irrelevant for deciding whether one should or should not join Lyoness (the correct answer obviously being the latter).

Then there is a third certificate, issued by the less-known 'IQNet', apparently 'an international network of partner certification bodies'. A long list of Lyoness-affiliated corporations are listed on the website of 'IQNet'. The listings all refer to the ISO 9001:2008 certificates issued by Quality Austria. Therefore, no value seems to be added by this 'certificication' (institute) either.

Currently, Plattform Lyoness is communicating with an official of the IQNet organisation about the certificates issued to Lyoness.

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The Lyoness Myths #5: Lyoness has never lost a court case

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

Today's myth is one of the main arguments used by Lyoness propagators to convince casual observers, and mainly doubting prospects, that Lyoness is a legitimate company operating a sustainable shopping community.

Lyoness propagators obviously claim that Lyoness is in no way illegal. To support this claim, they have used a variety of arguments. Usually, the first argument is that legal experts have thoroughly investigated the Lyoness business model and compared it to the national legislation of the country it was entering. However, when requested, the criteria and outcomes remain unknown, as well as the identity of the 'legal experts' who would have performed this investigation. Then, the irrelevant certificates are brought to the table. Also, nonsense arguments like 'Lyoness is registered at the Chamber of Commerce' are abused to 'prove' Lyoness' legitimacy.

One of the most beautiful arguments ever heard, though, is the argument that Lyoness cannot possibly be illegal, as it has never lost a court case. The flawed logic behind this argument, squirted into the heads of the deluded Lyoness participants, is that if a company or business concept has not been explicitly forbidden by a court, it is irrefutably legal.

This argumentation is of course complete nonsense, and anyone familiar with basic law principles and/or capable to apply common sense to this argument is aware that this is just an attempt to cover up the undoubtedly illegal activities that Lyoness performs.

However, next to merely being irrelevant and frustratingly unreasonable, this argument also constitutes a blatant lie. At a time where nearly any relevant Austrian agency is investigation or prosecuting Lyoness, the argument that the court has not explicitly forbidden Lyoness yet, holds. Of course, this does not make Lyoness legal in any sense - the proceedings have just not been completed yet.

Like with any pyramid scheme, there are (and will be) many victims of Lyoness suing the company for the damages they have sufferend, demanding retribution. Such civil law cases would essentially revolve around exactly the same question that will be posed by the Austrian authorities in their criminal law cases against Lyoness: 'is Lyoness operating an illegal pyramid scheme'?

The main difference is, however, that unlike in criminal law cases, the court in a civil law case cannot forbid Lyoness. If the court were to decide that Lyoness is in fact operating an illegal pyramid scheme (which it is), this would have as only consequence that Lyoness will be forced to reinstate the plaintiff(s) for the suffered damages. Neverthess, the qualification criteria would not be any different, it would be the same (or similar) judges taking the decision, based on exactly the same laws and regulations. In other words, if the civil courts force Lyoness to reinstate its victims, it qualifies Lyoness as an illegal pyramid scheme under the Austrian law.

Unfortunately, this has not happened yet (but hopefully it will soon). Nevertheless, the same principe applies for the legal question whether Lyoness had the right to create and offer investment schemes to the public without having received a license, having notified the appropriate authorities or having created a prospectus. The Austrian commercial district court of Vienna has decided on several occasions (1, 2) that Lyoness had no right to peddle its advertising campaign Ponzi scheme without providing the investors with a decent prospectus. By neglecting to do so, Lyoness has provided its investors with the opportunity to withdraw their investments from this scheme without requiring the consent of Lyoness. The same goes for the option-based Ponzi scheme entitled 'Premium Ranking Europe'.

In other words, everyone who has invested in the Ponzi constructions: 'advertising campaigns' and 'Premium Ranking Europe' can demand their money back. And, based on this, it can be concluded that Lyoness has violated the capital markets regulations of Austria by not issuing a prospectus for the investments it peddled.

Momentarily, Eric Breiteneder (Austrian lawyer specialised in investment and consumer law), functions as a legal respresentative in 20 other (pending) court cases, representing approximately 220 plaintiffs. In 2012, three out of eleven lawsuits were won by the investors. The other cases are mostly still pending. Also, Breiteneder has managed to settle the cases of about 20 investors, without going to court. Contrary to the investors going to court, the settlers received about 75% of their investment back (vs. 100% for those going to court).

The Viennese commercial district court mentioned in its ruling against the Lyoness' advertisement campaigns Ponzi scheme that:

"The success of the 'Lyoness system' depends on the number of newly-recruited customers[.]"

If the courts stick to this observation, it can never take long before Lyoness is convicted for running a pyramid scheme too.

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The Lyoness Myths #4: 'Competitors want to take Lyoness down'

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

When browsing the web for information on Lyoness, one may observe a strategy change in the propaganda spread by the Lyoness instigators and adherents. As reported earlier, many websites have been designed to frustrate the internet search of information-seekers on Lyoness, particularly those combining Lyoness with words like 'scam', 'fraud' and 'pyramid (scheme)'. Initially, these websites, blogs, as well as all other propaganda machines employed by Lyoness or its members, would focus on arguing that anyone spreading negative information on Lyoness, is just wrong.

Many arguments have been coined to explain why exactly people would devote their time to spread slander and libel on Lyoness. Jealousy was a popular one, just like the incapability to comprehend this amazing system. However, with all the media coverage on Lyoness in Austria and Switzerland, and more and more people realising that Lyoness has duped millions of people out of their hard earned money, even the Lyoness propagandists start to realise that these arguments have lost all credibility in the real world.

Therefore, a new strategy has been employed. Instead of attacking the message, now, the messengers are attacked. The magic term is apparently 'The Internet Marketing Scam Scam', and the basic suggested conspiracy is that internet marketers working for competing companies do everything to defame their competitors. This ridiculous idea is designed to play in on the feelings of adherents and prospects that life and happiness is about money and that it is impossible that anyone would devote personal time to fight an obvious scam, if there is no financial reward. Ironic, because ms. Jeanette Hayworth, one of the main Lyoness propagandists on the web spreading this theory, claims to have done her 'research' as a favour to a friend. If that were to be the case, and if people would only devote so much of their time to this for financial reward, then why does ms. Hayworth publish her ideas on the web? She could have just told her 'findings' to her friend.

Also, which competitors are we speaking of? Did not Lyoness always claim that they had come up with such an original business model? And that they would be unlimitedly successful because no-one else ever did (or will do) the same? Are we looking at Groupon? Probably not. Members could use both Groupon and the Lyoness cashback card.

Although heavily contested by the Lyoness propagandists, this blog has already concluded that the 'shopping community' and 'discount system' are a mere sham, thrown up to mask an obvious pyramid scheme. So perhaps, instead of searching for the 'unscrupulous competitors' amongst discount providers, they should be sought amongst pyramid scheme operators. That does not seem to make a lot of sense either, as tougher legislation in this area, and/or a conviction or liquidation of Lyoness could severe impede the accretion of new capital for those other pyramid schemes as well.

Additionally, if critics can provide quantifiable evidence that something is a scam, it does not really matter what their motives are. If an Apple employee were to tell that Dell laptops were highly explosive, the only thing that would matter is whether that is the truth. If Apple could provide quantifiable evidence that the laptops of their competitors are unsafe, they indeed should not be bought and the public has a right to know that.

Of course, this is a mute argument. It is preposterous to suggest that the reason that Lyoness is under so much scrutiny lately is that 'competitors are trying to take the company down'. The only ones spreading lies for financial reward are the Lyoness propagandists. Anyone who would consider all available quantifiable evidence on Lyoness (no matter from which source), would come to that conclusion. The same goes for anyone applying common sense to its 'business model'.

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The Lyoness Myths #3: 'Most participants just want discounts'

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by Lyoness how exactly they were deceived and lured into Freidl's web of lies.

In September 2012, Lyoness spokesman Mathias Vorbach wrote an article for the Austrian newspaper WirtschaftsBlatt in which he provided a company response to the increasing allegations that Lyoness is not operating a shopping community - it is in fact exploiting a pyramid scheme. Vorbach claimed that the vast majority (well over 90%) is not participating in 'sales' or referral, but merely joined to obtain a free discount card.

This company line has often been used by the adherents of Lyoness too, when trying to persuade prospects to become a (premium) member of Lyoness. In order to make the prospect feel special, and give him/her the idea that Lyoness is a viable business opportunity, it is stressed that one should not be afraid of market saturation (i.e. being unable to enrol new members), as nearly all members that have joined Lyoness so far, did so to enjoy the amazing discounts Lyoness offers. In the same line, the doubting prospect is made to believe that since so many people joined Lyoness 'just so they could get all these tremendous discounts', there is an potentially unlimited supply of new recruits. As a way of building the ego of the prospect, they are persuaded to believe that their set of unique capacities is exactly what is needed to build a successful business within Lyoness. This implies (and implants within the brain of the prospect) that others are less, and have not been asked to become a business partner because 'they lack what it takes to become successful'.

In fact, like with any pyramid scheme, anyone is encouraged and pressured to join, and to invest as much as possible. It is ridiculous to believe that Lyoness would 'select' their prospects based on suitability, because it inherently needs to attract as many as possible investors and as much as possible capital in order to keep the scheme going. On a lower level, this applies to the recruiters/adherents as well. Money is made if you recruit, so recruit anyone you can ('das heisst positionen, positionen, positionen, positionen').

According to Vorbach, in September 2012, 90% of the members of Lyoness only joined Lyoness to enjoy the benefits of owning a cashback card. In 2012, Lyoness had 2.3 million members, so this would mean at least 2.070.000 participants would at least use the card once. However, in May 2013 it became known that only about 10% of the current Lyoness members have used the cashback card. This amounts to 270.000. This would mean that over slightly more than half a year, roughly 1.8 million members would have stopped using the card. Not a very good product then, is it?

It is considerably more likely that Mr. Vorbach was simply lying about the 90%. Indeed, if 90% only subscribed to become a 'free member', 10% of the participants (230.000) would have brought in 99.67% of the 2012 turnover, roughly 997 million in advance payments or saved up discounts. As the amount of saved up discounts is negligible, this would mean that the average business partner would have put in 4300 euros in one year. Yet, the discounts they would supposed start earning over would be virtually no existent, as 90% of the members would have to share about 12 million in discounts, or 5 euro annually per member. Probably not exactly the point Vorbach was trying to make.

In reality, at least 90% of the participants never even used the cashback and only joined to be able to recruit, and get a commission over the investments made by the people they bring in. This is a conservative estimate, as using the cashback card naturally does not preclude simultaneous recruiting activities (in fact, one would expect everyone to use the card). Therefore, it can be expected that effectively every member of Lyoness is a 'premium member', trying to recruit new victims for the scam. The 10% that do use the card once in a while spent averagely about 1100 euros at Lyoness loyalty partners last year. This would give them an annual return of about 30-45 euros. This makes it more understandable that virtually no-one bothers to use it.

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The Lyoness Myths #2: pyramid rebuttal

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by  Lyoness how exactly they were deceived and lured into Freidl's web of lies.

Today's myth concerns the rebuttal of pyramid allegations by Lyoness adherents and instigators. There is a number of known, standard-reactions that can be heard from anyone involved in a pyramid scheme when they are told the truth. Rather than list this exhaustive list, which anyone who has been involved in - or has ever spoken to anyone involved in a pyramid scheme - can dream, I would like to focus on the defamation and ridiculing of critics and sceptics, particularly by doubting their evaluative capacities and calling them names.

Anyone who has ever had the seemingly good idea to tell an acquaintance that they are in fact enrolled in a pyramid scheme knows that this is never appreciated. The deluded victims have been instructed exactly how to respond to these negative people (called 'losers') and the main advice is usually just to ignore them. It is often claimed that these 'negative losers' are ill-informed, lack the abilities to understand such a truly amazing, but complex business opportunity and have never succeeded at anything in their lives (and never will).

An often-heard question is 'who would you rather listen to? A successful business man like [Hubert Freidl] or some 'negative loser' that has never achieved anything in life?'. This may sound plausible, but what exactly has mr. Freidl been successful in? In many a piece of company propaganda, Hubert Freidl has been made out to be a truly successful business man, who discovered his entrepreneurial spirit and talent for golden deals already when he was only 23.

And indeed, Freidl has a list of companies on his name, starting in the beginning of the 1990s. However, whenever is bragged about Freidl's successful past, there are never any references to any of these businesses and in fact, they have all ceased to exist. Also, at least two of these companies ran similar schemes to Lyoness.

Alright, perhaps Freidl has owned more (ill-gotten) money in his life than most of us here. Even though our common-sense arguments stand and combined with the growing amount of quantifiable evidence available on the matter, it makes a pretty irrefutable case. However, for the people who are not convinced, I would like to reference the assessment of the 'Lyoness business opportunity', pitched by a truck driver from Ontario, Canada, by five fairly rich investors.

The panel consisted of Kevin O'Leary (net worth 300 million), Bruce Croxon (20 million), Arlene Dickinson (80 million), Robert Herjavec (100 million) and Jim Treliving (640 million). Now I dare say they are worth more than most of us here, as well as that their annual income is well above that of the average Lyoness 'premium member'. Additionally, contrary to Hubert Freidl, these people do have a proven track record in doing business, and are in no way ashamed, embarrassed or even reserved in telling which companies they founded and owned. Also, most of their businesses stuck around, even when they started a new one.

Truck driver Andy from Ontario got the chance to convince these successful business people that Lyoness is an opportunity they should collectively invest 175,000 dollars in. See the video hereunder, the segment starts at about 24:40.

 

By all means, do not believe what I write just because I have a blog, do not believe what other sceptics write, just because they have a blog. Just remember, if you are going to believe the successful business man, pick one that actually is.

Of course, it would be even better if you would gather all quantifiable, objective evidence and make up your own mind.

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The Lyoness Myths #1: Lyoness is endorsed by major corporations

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The Lyoness myths section was developed to assess the validity of the arguments used by Lyoness instigators and adherents to 'prove' that Lyoness provides a viable business opportunity. It should provide people considering to become a Lyoness member with a more balanced view of the 'overwhelming' sales pitch of the Lyoness racketeers, as well as show people defrauded by  Lyoness how exactly they were deceived and lured into Freidl's web of lies.

The first myth to be discussed in this section is the often-heard argument that Lyoness has to be legit: why else would so many large corporations (with advanced legal departments) have agreed to do business with Lyoness and be publicly linked to this company?

Before assessing whether this argument is valid, it should be noted that this form of argumentation lacks relevance for deciding whether one should do business with a company. There have been many known scams which paraded around presentation slides full of logos and names of huge multi national corporations in order to persuade people to join. In fact, nearly every pyramid scheme that used a shopping card as an easy, low maintenance 'product' to be able to plead that it was in fact running a 'legal multi-level marketing scheme', has bragged about its long list of solid partners. See also the prior schemes of Freidl (GTS and Galvagin).

How can that be? Do not these corporations have their lawyers have a look at the company before they sign a contract that gives this company the right to use their name and logo, and claim they are affiliated? Well, there are several possible answers to this question. In the case of Lyoness, third parties have been used to bring the large corporations and Lyoness together. In that scenario, the large corporation (and especially its legal department) may never even have heard of Lyoness. These allegations proved true already in April  2011, when Spar (Austria's largest supermarket chain) and several other notable companies declared that they had not given Lyoness permission to use their name and logo, or even that they were unaware that they were doing business with Lyoness. Lyoness reluctantly informed their 'business partners' about these developments.

When a large share of the European loyalty partners of Lyoness were contacted, most of them declared not to have been aware of an affiliation with Lyoness, and some of them had never even heard of Lyoness. Again, most of the companies had been linked to Lyoness through third parties. Major corporations like the French supermarket giant Carrefour and Lego, after being thoroughly informed of the illicit and fraudulent activities of Lyoness, decided to annul the alleged partnership. Comparable stories have been heard from all over the globe, like for companies as Woolworths, Tesco, Mediamarkt, Saturn, etc.

In general, any company can pretend to be the partner of another company. Most often, one can just copy a logo and a name from the internet and put it on a slide. Especially when this slide is shown in a hall where an invitation-only recruitment meeting is held, and where the business opportunity eclipses the discount card, no-one will ever know. Another way to go is to approach a local franchise holder. In the case of big franchise networks, one will always able to find one that is willing to provide discounts. As you may know, franchise holders often have the right to use the company logo and name (that is namely what they mainly paid for while obtaining the franchise). Through agreements with them, anyone can use the logo and name of the mother company.

It should be noted that such tactics are unsustainable if one is really interested in exploiting a shopping community. However, if the only goal is to make people pay to subscribe at a recruitment event, they may  just suffice.

Lyoness has a significant list of loyalty partners. This is not because so many large corporations with ditto legal departments 'saw the unlimited potential of this company'. In fact, the vast majority of Lyoness' loyalty partners are small and medium-sized enterprises - the main target group of Lyoness' recruitment efforts. In order to become a Lyoness loyalty partner, a company needs to become a 'business partner' or 'premium member' too. This means that an advance payment of at least 2000 euros is required. In most cases, they only signed up to possibly obtain some extra costumers and to benefit from Freidl's incredible 'money machine'.

The large corporations, with who's logo and name Lyoness is planning to brag, obviously do not have to pay. If those corporations have ever heard of Lyoness or actually negotiated with them, they have been sucked up to like crazy. However, in most cases Lyoness just bought a bunch of gift vouchers through a third party. Most corporations do not bother at all who is providing people with discounts on their products (and why would they?) - they will be happy if it increases their sales, and if it does not, it is the problem of the buyer.

The only thing these corporations should be aware of, is that when Lyoness finally collapses, their name might suffer some collateral damage. The ones that have realised that have already demanded their name and logo to be removed from all Lyoness communication and if the media attention keeps growing, others will certainly follow.

In conclusion, do not be persuaded into doing business with a company just because they can present an impressive slide of alleged partners - that proves nothing. The techniques used by pyramid fraudsters are designed to make prospects overlook the obvious fact that no legitimate system will ask you to pay thousands of euros and encourage you to make your friends do the same. Be sceptical towards whom you do business with and do not let racketeers fool you into joining an obvious scam.

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