Back in August we reported that the Australian Competition and Consumer Commission (ACCC) had
filed a lawsuit against Lyoness
.

As with our own
Lyoness review
, a press-release from the ACCC indicated that they had taken issue with Lyoness’ accounting unit investment scheme.

Today we take a closer look at particulars of the ACCC’s case.

The ACCC’s Statement of Claim was filed on the 28th of August in the Federal Court of Australia (NSW).

It lists four respondents:

Lyoness Australia

Lyoness Asia

Lyoness UK and

Lyoness International

The Statement of Claim briefly covers the cashback component of Lyoness’ compensation plan, before getting into the logistics of the AU investment scheme.

Lyoness affiliate downpayments are targeted, which the ACCC content offer no benefits outside of the Lyoness compensation plan and in limited circumstances, recovery of the funds used to pay for downpayments.

The ruse pushed to cover up affiliate investment in accounting units is that AU investments were “downpayments on shopping”.

Yet as the ACCC reveal downpayments made can be switched willy-nilly among Loyalty Merchants. The downpayments aren’t tied to any specific merchant.

How is this possible?

Well, as I’ve pointed out many times before, AU investment funds are deposited with Lyoness. They are external to the merchant shopping network.

The vouchers were in effect “Lyoness vouchers”, which were only converted to shopping credit with a particular merchant upon accounting unit maturity.

As to the particulars of the AU investment scheme, Lyoness affiliates are required to invest in a specific number of units to qualify for commissions. They also need to recruit at least four affiliates into the scheme (who also invest in accounting units).

With all accounting unit investment funds retained and paid out by Lyoness, naturally they can’t pay out ROIs without new money being invested.

The amount of Loyalty Commission payable to a member depends wholly on the number of units they’ve invested in and what levels those units are on. An affiliate can maximize their position leverage by investing in units adjacent to eachother (stacking).

An affiliate earns 18.75% of the total Loyalty Commission paid out to any directly recruited affiliates and 6.25% paid to any of their recruited affiliates (level 2 downline and beyond).

The Loyalty Credit is of particular note here, as many Lyoness investors market the legitimacy of the program based on the fallacy that Loyalty Credit must be spent within the merchant network.

Rather, Loyalty Credit is able to be re-invested in Accounting Units to increase an affiliate’s investment portfolio.

In addition to this credit, there’s also the creation of bonus units, subject to a specific number of units being invested in a given Accounting Unit Category.

With no membership fees, the creation of bonus units yet again demonstrates the willingness with which Lyoness shuffles actual invested funds to existing members.

Final

🤖 Quick Answer

What was the ACCC's primary concern regarding Lyoness' business model?
The Australian Competition and Consumer Commission filed a lawsuit against Lyoness entities in August, targeting the accounting unit investment scheme. The ACCC claimed that affiliate downpayments offered no legitimate benefits outside the investment program itself, questioning the scheme's legitimacy and consumer protection compliance.

Which Lyoness entities were named as respondents in the Federal Court case?
Four Lyoness respondents were listed in the Statement of Claim filed in the Federal Court of Australia (NSW): Lyoness Australia, Lyoness Asia, Lyoness UK, and Lyoness International. The claim examined both cashback compensation components and investment scheme logistics.

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