On March 30th, Austrian attorney Eric Brieteneder initiated ten class-action lawsuits against Lyoness, representing 220 investors. This legal action comes a decade after Lyoness's launch in its home country, where authorities have also opened a criminal investigation into the company's operations.
Lyoness, founded in Austria in 2003 by CEO Hubert Freidl, operates globally as "Lyoness International." Austria remains its initial market and one of its most developed. Despite this, hundreds of investors have filed complaints demanding refunds from the company.
The company presents a shopping merchant network where affiliates buy products and earn cashback. This network operates alongside an "Accounting Unit" (AU) investment scheme. Lyoness affiliates invest fixed sums directly with the company. They then receive a return of over 100% once a specific number of new investments are made by their downline.
The exact return on investment depends on the initial amount put into one of five Account Unit packages. Lyoness affiliates often point to the merchant network's legitimacy to support the AU scheme. But all money invested in the AU scheme and all payouts to affiliates are handled solely by Lyoness. This means the investment scheme operates separately from the merchant network.
When new investment in Accounting Units slows, later investors find themselves waiting for new money that never arrives. Their investments have already gone to pay earlier participants. This appears to be the situation now in Austria, judging by the numerous angry investors.
Attorney Brieteneder has sued Lyoness before. He claims Lyoness has settled at least 20 prior cases out of court. Brieteneder represented investors in three of those cases, securing refunds for his clients.
Brieteneder stated Lyoness paid out 48,000 EUR ($61,450 USD) in these settlements. It is not clear if this amount was per investor or a total sum.
The current lawsuit argues that money invested by his clients in Lyoness is untraceable. Brieteneder said, "If consumers deposit (invest) money in such a system, they have the right to reclaim their money."