The Austrian Supreme Court has ruled that Lyoness’ affiliate contract and compensation plan are illegal.

The decision follows legal action taken by the Austrian Association for Consumer Information (VKI).

In Austria’s lower courts, VKI argued

47 contractual clauses that were part of Lyconet agreements and so-called Lyconet compensation plans … (lacked) transparent regulations and … clarity.

VKI’s lawsuit was decided in its favor. The Supreme Court’s ruling reaffirms earlier rulings and is final.

As per a
January 11th press-release from VKI
, specific Lyoness agreement clauses they took issue with were 3-2019, 9-2019 and 1-2021. Compensation clauses include 3-2019, 9-2019 and 1-2021.

A large number of the contested clauses were found by the courts to be non-transparent. For example, terms such as “Bonus Units”, “Customer Units”, “Follow-up Units”, “Transfer Units”, “Lifeline”, “Upline”, “Balance Program”, “Career Program”, “Balance Category”, and “Balance Commission” were used, but their specific meaning remained unclear.

The first court already stated that these are not terms of general language use and that they are in themselves incomprehensible without further context.

They are also not explained sufficiently clearly throughout Lyconet’s rules and regulations.

The appeal court added that even after intensive study of the entire set of regulations, it remains completely unclear for average consumers when and to what extent they acquire rights to which remuneration.

The Supreme Court has now confirmed this view.

As per the Supreme Court’s decision;

Affected Lyconet contracts are invalid and consumers can demand a full refund of the payments they have made.

In step with the Austrian Supreme Court’s decision, a Swiss court also
ruled Lyoness’ affiliate contracts were illegal
in 2016.

Lyoness, aka Lyconet, Cashback World and myWorld, is owned and operated by Austrian national Hubert Freidl (right).

Austrian courts previously finding Lyoness to be a pyramid scheme. A related
January 11th article from ORF
, the Austrian Broadcasting Corporation, cited “over 400 court cases” in Austria alone.

Despite this, Freidl is still a free man.

BehindMLM reported on
ongoing Austrian criminal proceedings against Freidl
in 2016. Eight years later there are still no substantial updates to report on.

Freidl had Lyoness
declare bankruptcy in Europe
last November. According to filings Lyoness is $110 million in debt.

Whether this was a ploy to avoid paying out victims and/or evading criminal proceedings is unclear.

Freidl abandoned his FaceBook profile in July 2023. November 2023 posts on Freidl’s Instagram page reveal attempts at marketing Lyoness across Asia, specifically Malaysia.

🤖 Quick Answer

What did the Austrian Supreme Court rule regarding Lyoness contracts?
The Austrian Supreme Court declared that Lyoness' affiliate contract and compensation plan are illegal, upholding earlier lower court decisions. The ruling followed legal action by the Austrian Association for Consumer Information, which successfully challenged 47 contractual clauses for lacking transparency and clarity in their regulations and terms.

Which organization initiated the legal action against Lyoness in Austria?
The Austrian Association for Consumer Information (VKI) initiated the legal proceedings against Lyoness. The organization challenged the legality of affiliate agreements and compensation plans, arguing that multiple contractual clauses lacked transparent regulations and adequate clarity for consumers.

What specific clauses were contested in the Lyoness legal case?
The contested clauses in Lyoness agreements included sections 3-2019, 9-2019, and 1-2021 from both affiliate

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