Poland's Office of Competition and Consumer Protection accused Lyoness Europe AG of running a Ponzi scheme. The accusation follows an investigation into the company's merchant shopping network. The agency's concern centers on an investment scheme hidden within Lyoness's loyalty program. Participants receive rewards primarily for recruiting new members into the system.
New recruits pay money by buying vouchers or gift cards from Lyoness partner merchants. They can also make purchases using these. Lyoness presents these cash injections as shopping activity. But the OCCP states the true mechanism shows affiliates depositing funds and then recruiting others to do the same. This system allows returns over 100 percent on initial investments. While shopping could generate some returns, the regulator notes it is impractical compared to the recruitment path.
This current OCCP investigation follows a prior failed attempt to stop Lyoness. In 2019, the Public Prosecutor's Office in Kielce dismissed its case against the company. It cited insufficient evidence to prove Penal Code violations. Now, the competition authority seeks public information about Lyoness operations.
If the OCCP finds wrongdoing, it can fine Lyoness Europe AG. It could also pursue criminal charges against local operators. Poland counts approximately 100,000 Lyoness affiliates, a significant market for the company.
Mathias Vorbach, a Lyoness spokesperson, rejected the allegations. He stated, "Receiving benefits in the Lyoness loyalty program is conditional only on purchases carried out by its members." Vorbach explained that a recruiter gets up to 0.5 percent of a purchase when a recruited person buys something. He maintained that benefits depend on members reaching a fixed minimum spending threshold, not on new recruit contributions.
"There is no question of any criterion that would suggest the construction of a pyramid scheme," Vorbach added. He described Lyoness as a commission-based system. Partner companies pay affiliates agreed-upon commissions for selling products or services, either directly or via coupons. These commissions, he said, fund member cashbacks and bonuses.
The dispute centers on whether Lyoness participants act as customers making purchases or investors seeking profit from recruitment. The OCCP holds the latter view. The investigation continues, with investigators seeking further information about the company's operations.