Mastercard continues its fight to stop Lyoness, an Austrian multilevel marketing scheme, from trading on its brand name. Lyoness launched a prepaid Mastercard in June 2014, seeking to present itself as a legitimate business.
Investigators have described Lyoness as a Ponzi-like investment operation. The company's strategy was clear: associating with a recognized financial brand like Mastercard would confer legitimacy. Affiliates then marketed the card as proof of Mastercard's endorsement.
By January 2015, Mastercard publicly distanced itself. The company stated it had "no direct relationship" with Lyoness. It demanded an end to the brand's misuse.
Lyoness did not comply. Over 18 months later, the company and its network still presented themselves as Mastercard partners. In South Africa, a promotional email advertised a Lyoness Mastercard polo shirt, prompting an immediate response from Mastercard's legal team.
Gerald Gruber, CEO of Mastercard Austria, addressed the issue in July with the Austrian business publication Wirtschafts Blatt. He stated, "We will do everything that is necessary to keep damage to our brand."
The situation is complex due to intermediaries. Mastercard never directly issued the Lyoness cards. A UK-based card issuer handled the work. Then came MyCard, a "card solutions" company incorporated in Gibraltar, claiming an exclusive contract with Lyoness. MyCard said it rolled out the Lyoness prepaid card across 21 countries simultaneously, later expanding to 45. MyCard has operated since 2014, though its original incorporation location remains unclear.
MyCard created the Lyoness card program without Mastercard's approval, according to Gruber. He noted, "We have warned our contractors accordingly."
Gruber believes the Lyoness prepaid card program has already ceased operations. However, images of the card still appear on various websites. Mastercard issued fresh warnings to its contractor network after the South African promotional email surfaced.
Lyoness claims ignorance. The company states the card program was merely a trial in five countries before its discontinuation. Lyoness argued it wanted to build a global system, and the existing Mastercard program would not work for that goal.
Mastercard has not yet filed a lawsuit. Gruber made it clear the company is prepared to pursue legal action. He stated, "Legal action has been threatened."