Update: The Australian Competition and Consumer Commission has lost their case against Lyoness.

The Australian Competition and Consumer Commission has taken court action against the Lyoness scam alleging that the Lyoness Loyalty Program constitutes a pyramid scheme.

After looking at the income disclosure for Lyoness, I would have to agree with the ACCC. The median income of all Lyoness scam members is $0.04 and of all IBRs is $28.00.  With many people spending $3000 to become a premium member, there are a lot of people losing money in this scheme. This high level of loses is common in pyramid schemes.

Here is a video of how the Lyoness scam is promoted in the USA.

Lyoness Video

ACCC chairman Rod Sims told news.com.au: “The old days of simple pyramid selling don’t exist anymore, understandably. They’re complex schemes. The judgement we make at a high level is whether your money essentially comes from signing up other people rather than selling something of substance.”

What is a product-based pyramid scheme?

The ACCC alleges that the Lyoness scheme offers commissions to members who recruit new members who make a down payment on future shopping.

The ACCC also alleges that the conduct by Lyoness breached the ACL prohibition on ‘referral selling’, where a consumer is induced to buy goods or services by the promise of a commission or rebate contingent on a later event.

Under Australian Consumer Law, it is illegal not only to establish or promote a pyramid scheme, but also to participate in one in any capacity.

The first hearing will be in Sydney on Tuesday September 16th. – Source News.com.au

Here is a video of Lyoness being torn apart on the Dragons’ Den.  This is not going to end well.

Dragons' Den

Lyoness – The Company

Founded in 2003, Lyoness has created a global network from which Members and Loyalty Merchants can benefit: Members receive money back, while Loyalty Merchants gain loyal customers and provide them with special benefits.

Lyoness is currently active in 33 European countries as well as in the U.S., Canada, Brazil, the United Arab Emirates, Qatar, South Africa and in the Asia Pacific (Hong Kong, Macau, Australia, Philippines, Thailand, New Zealand) with more than 4.0 million members worldwide.