Norway's Gaming Board has reopened its investigation into Lyoness, a company now facing scrutiny for possibly operating an illegal pyramid scheme. This action follows approximately fifty complaints filed within a single year, prompting a re-evaluation of the board's 2013 conclusion that Lyoness did not fit the legal definition of such a scheme.
The board's April 6th letter to Lyoness details allegations that participants earn money primarily by recruiting new members, not through the sale of actual products. Some individuals reportedly paid hundreds of thousands of Norwegian kroner, expecting returns ten times that amount within three years. Regulators are particularly concerned about the targeting of young people, with reports of teenagers and those in their early twenties investing their savings. Participants also claim a lack of transparency regarding the destination of their funds and the mechanism for promised payouts.
Recruitment tactics described in the complaints mirror those common in pyramid schemes. Lyoness meetings allegedly employ high-pressure sales tactics, urging immediate action with phrases like "You have to hurry now, soon the opportunity will disappear." Attendees reportedly leave with the impression that payments to earlier members are funded by new recruits' money, rather than legitimate business revenue. The Gaming Board also highlighted misleading claims about corporate partnerships, with Lyoness reportedly mentioning companies at meetings that have not entered into formal agreements. Promised income streams appear to be theoretical, usable within the system but not withdrawable as cash.
The regulator's current stance reveals frustration with its 2013 investigation, which accepted Lyoness's assurances without examining operational principles. This earlier decision apparently failed to resolve the issues, leading to continued complaints. Lyoness submitted a response to the Gaming Board on May 30th, though its contents remain undisclosed. The investigation is ongoing, with an uncertain outcome. However, the board's willingness to revisit its prior findings suggests a degree of confidence in the recent complaints and serious doubts about Lyoness's business practices.