Poland’s top consumer protection agency has ruled Lyoness is a pyramid scheme.
The Office of Competition and Consumer Protection (UOKiK) handed down their decision on December 30th, 2019.
I believe however it was only recently released to public, as evidenced by
local news picking up the story
a few days ago.
As per UOKiK’s decision, commissions through Lyoness’ MLM business opportunity “depend(ed) on the introduction (of) other people”.
These recruits made “advanced payments”, which is the
inherent Ponzi scheme within Lyoness
we first identified back in 2012.
In summary, once again Lyoness’ cashback shopping portal was deemed insignificant compared to direct investment.
UOKiK identified Lyoness’ pyramid scheme as a breach of Poland’s unfair marketing practice and consumer protection laws.
The decision notes Lyoness’ claim that its Ponzi scheme was “discontinued” in Poland as of March 2019.
UOKiK’s ruling also paves the way for investor refunds. Lyoness is required to inform Polish victims they are entitled to refunds, and provide details of how they can apply.
Refunds on Lyoness investment must be made within four months from UOKiK’s order being made final.
Lyoness was also ordered to pay UOKiK’s legal costs (which for some reason was only $50 USD).
In response to being declared a pyramid scheme, Lyoness told Gazeta Prawna that UOKiK’s decision was “unlawful”.
In addition, the product that the office analysis concerns is no longer offered by Lyoness for years.
This is of course a half-truth. Lyoness has a track record of changing its company names when regulators catch on.
In Norway Lyoness tried to evade a regulatory ban by
changing the name of its investment scheme to myWorld
.
Norway’s Gaming Board saw through the ruse and
reaffirmed their original ban
.
In Poland, Lyoness told UOKiK “Lyoness” stopped operating in March 2019. This however simply refers to Lyoness changing its name to Lyconet and continuing to offer the same fraudulent scheme.
Like the Nowegian Gaming Board, UOKiK wasn’t interested in Lyoness’ pseudo-compliance either.
The President of UOKiK found that the practice infringing collective consumer interests was the subject of these proceedings was discontinued upon its cessation running the Lyconet Marketing Program, which took place on March 7, 2019 together with with the entry into force of the Lyconet Agreement for independent Lyconet Marketers (Independent Lyconet Marketer).
After this date the Program is run by Lyconet International AG based in Vienna, Austria.
It should be stated that the Company has not demonstrated that the above requirement was real and not merely apparent.
Investigations into Lyoness in Poland began in 2013.
BehindMLM first reported on UOKiK (then OCCP)
stating publicly
that Lyoness “can be a Ponzi scheme” in February 2014.
In May 2016 the OCCP ruled
Lyoness’ affiliate investor terms and conditions were illegal
.
By December 2017 OCCP was going by UOKiK, and
issued yet
🤖 Quick Answer
What did Poland's consumer protection agency rule about Lyoness?
Poland's Office of Competition and Consumer Protection (UOKiK) determined on December 30th, 2019, that Lyoness operates as a pyramid scheme. The agency found that commissions depend primarily on recruiting new members rather than retail sales, with recruits making advanced payments constituting an inherent Ponzi mechanism.
How did UOKiK classify Lyoness' business model?
UOKiK identified Lyoness as operating an MLM structure where income derives from member recruitment rather than legitimate product sales. The cashback shopping portal was deemed insignificant compared to direct investment requirements, violating Poland's unfair marketing practices and consumer protection regulations.
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