It’s not exactly how I pictured easing myself back into blog coverage of the MLM world, but news broke last night that Lyoness are being prosecuted by Australian regulators.

As per their website, the Australian Competitor Consumer Association (ACCC)

promotes competition and fair trade in markets to benefit consumers, businesses, and the community. We also regulate national infrastructure services.

Our primary responsibility is to ensure that individuals and businesses comply with Australian competition, fair trading, and consumer protection laws – in particular the Competition and Consumer Act 2010.

So what’s their beef with Lyoness?

Lyoness International AG, Lyoness Asia Limited, Lyoness UK Limited and Lyoness Australia Pty Limited (together ‘Lyoness’) (are) operating a pyramid selling scheme and engaging in referral selling.

How totally not surprising.

BehindMLM
first reviewed Lyoness back in 2012
and the discussion over the legitimacy of the company continues even today. Despite the mountains of smoke and mirrors Lyoness have armed their affiliates with, I’ve maintained that
nothing
excuses or justifies the Accounting Unit Ponzi scheme Lyoness has buried in its compensation plan.

Stopping short of referring to the scheme as an outright Ponzi (which it obviously is), here’s how the ACCC explain
the problematic nature of Lyoness’ compensation plan
:

The ACCC alleges that Lyoness has operated the scheme in Australia from mid-2011 and that it continues to operate the scheme. The scheme offers ‘cash back’ rebates to members who shop through a Lyoness portal, use Lyoness vouchers or present their Lyoness card at certain retailers.

Whilst cash back offers themselves are not prohibited by the Australian Consumer Law (ACL), the ACCC alleges that the Lyoness scheme also offers commissions to members who recruit new members who make a down payment on future shopping.

“Pyramid schemes are often sophisticated and may be operated under the guise of a legitimate business. Although these schemes can appear to be legitimate, the most significant inducement for new members to get involved is to earn ‘residual’ or ‘passive’ income from new members signing up,” ACCC Chairman Rod Sims said.

“The concern with pyramid schemes is that the financial benefits held out to induce potential members to join up rely substantially on the recruitment of further new members into the scheme. For these schemes to work so that everyone can make a profit, there would need to be an endless supply of new members.”

The ACCC also alleges that the conduct by Lyoness breached the ACL prohibition on ‘referral selling’, where a consumer is induced to buy goods or services by the promise of a commission or rebate contingent on a later event.

The mention of “down payments” is precisely the AU investment component of Lyoness’ compensation plan that functions as a Ponzi scheme.

Affiliates join Lyoness, invest money
directly
with Lyoness under the guise of shopping and th

🤖 Quick Answer

What is the ACCC action against Lyoness?
The Australian Competition and Consumer Commission (ACCC) filed a lawsuit against Lyoness entities, alleging they operated an illegal pyramid scheme. The regulatory body, responsible for enforcing Australian competition and consumer protection laws under the Competition and Consumer Act 2010, initiated prosecution to protect consumers and ensure market fairness.

What regulatory role does the ACCC perform?
The ACCC promotes competition and fair trading in Australian markets, benefiting consumers, businesses, and communities. It regulates national infrastructure services and ensures compliance with competition, fair trading, and consumer protection legislation, particularly the Competition and Consumer Act 2010.

Which Lyoness entities were targeted by the ACCC?
The prosecution named four Lyoness entities: Lyoness International AG, Lyoness Asia Limited, Lyoness UK Limited, and Lyo

🔗 Related Articles

- Juan Carlos Reynoso denied OmegaPro pretrial release
- OmegaPro securities fraud warning from Nicaragua
- OmegaPro securities fraud warning from Chile
- OmegaPro Trade Review: Recovery scam targeting victims
- OmegaPro’s Andreas Szakacs arrested in Turkey