Lyoness America Violating Pyramid, Ponzi, Business Opportunity & Security Regulations?

I was in Dallas a few months ago, and received an envelope with a document titled “Notification of Lyoness America violation of Pyramid, Ponzi, Business Opportunity and Security Regulations. Even though this two page document came from a very well-known direct sales, MLM, Network Marketing expert, we waited and continued to research the regulations and what regulators have been doing to close down money schemes in the USA.

Editor’s Update: It was pointed out to me by Jack Weinzierl, that I stated Lyoness was based out of Australia. I should have stated Austria.

Currently the Financial Fraud Enforcement Task Force, is moving throughout the USA closing down and getting solid convictions and settlements for the consumers. If  Lyoness is found to be a Pyramid or Ponzi, then you can bet the settlements will be in the multi-millions of dollars. Hopefully, it will not be another Zeek Rewards!

Financial Fraud Enforcement

The Financial Fraud Enforcement Task Force is made up of the senior-level officials from the following federal departments, agencies and offices for Best Tig welder:

This type of collaboration between agencies may be the biggest in history and is driving the activity we are currently seeing. Sadly, short sellers, critics and many in the media have not yet figured out, that agencies like the FTC (Federal Trade Commission) is not going easy on network marketing companies. Instead they are using their resources to truly nail the contrepreneurs — (marketers who use hyped-up promises to sell business opportunities to people eager to be their own boss.) That term was first used by Lesley Fair in the article titled: Cracking down on contrepreneurs.

So, back to Lyoness…

Lyoness

 

So even though Lyoness International have been around for 10 years, that doesn’t make it legal in the USA, and they may have to defend their compensation model if the alligations below are found to be true. This same issue has happened to US based companies who have gone into Great Britain, Austraila, China, and other counties.

Lyoness Cashback - Money Back With Every Purchase - Lyoness US

The following are links to other investigative editorials which seems to strengthen the purported alligations I received. I pulled from BehindMLM, not because I always agree with Oz, but because I trust him to report the facts… And a little subjective opinion from time to time 🙂

BehindMLM

May 2012: Lyoness US Review: Cashback and investment returns?

April 2013: Lyoness lawsuits and investigation in Austria

May 2013: Lyoness CEO: “It’s all about positions!”

May 2013: Lyoness 2012 Income Disclosure Statement analysis

June 2013: Lyoness corporate webinar spells out Ponzi scheme

Complaint Centre Lyoness

The above website is dedicated 100% to covering the Lyoness Company worldwide!

Here is the one article I have written over the last couple of years on Lyoness:

May 2012: MLM News Update: Lyoness Hires MLM Law Firm Grimes & Reese To Represent Them In The USA

You can review the alligations below! We will continue to follow Lyoness and update this community as more info on Best Tig welder is published.

Lyoness America

Lyoness America

 

 

 

Spread The News!

53 thoughts on “Lyoness America Violating Pyramid, Ponzi, Business Opportunity & Security Regulations?”

  1. Hi Troy,
    Is been suche long time I have post my last msg in regards to this topping, I’m really happy that you have move thinks forward and this only show you as professional person now you can see thinks different way that what we all should do before judging anythink or anybody specialy when we have power of being public opinion person,
    Let then clear out all of this rumour about Lyoness, and build up such amazing concept.
    Best Regards
    and Prosperous of 2014

  2. Most blogs as with all media have inaccuracies. This is why I do like the fact Lyoness USA was willing to talk with me, and provide a written response to the allegations.

  3. Nobody “has” to buy any minimum required. There is no membership fee, there is no expiration and they do business with companies like Walmart, Home Depot, Walgreens, Target, BP, Mobil, Chevron, CVS, American Airlines, Kmart, Sears, Best Buy, Subway and another more than 150,000 stores in 44 countries. So I take it that this expert is saying that all the hundreds of thousands of attorneys from all these mutli national companies and other 150,000 merchants and all the 44 countries with their laws and regulations are being a bunch of idiots, all being taken advantage of by Lyoness? The man must be a genius. You do not carry inventory, you do not sell anything, but you do get cash back by doing what you already do, which is shopping. If one decides they want to put a downpayment, the money does not go to somebody in his “pyramid” or whatever you want to call it. Again, this is your money, a downpayment, so for one to say they lost money with this, they must have had a complete misconception about this company. If, again, IF you do a downpayment, you have, HAVE to purchase product. This is product based. If everybody started putting money into this expecting to get paid money , then yes, this makes it a pure Pyramid, illegal. IF one was so stupid to do something like that, don’t go crying and complaining because you were a moron. Get the facts instead of listening the the idiots that think they can get rich by putting in $3,000 and then wait and do nothing. As far as lawsuits and investigations go, Walmart get what, 5,000 lawsuits per year. I don’t see anybody saying stay away from Walmart, they are investigated/doing illegal stuff just because a guy with a blog got an “expert” to give his “expert” opinion on how they operate.

  4. Anthony,

    Thank you for this additional info.

    My focus at this point is Lyoness USA. However, in researching Lyoness USA we are taking into account info that comes in from across the Globe and have started to review legal actions worldwide.

  5. In reference to the content written by Mr Mike Purcell from the U.K we would like to point out that if the Lyoness loyalty program functioned on the merit of a true loyalty program there would be no need to purchase “units” as Mr Purcell states…
    All units should be generated from shopping activity eliminating the accusations raised that Lyoness is operating a pyramid selling scheme.
    The evidence seen particularly from the ORF reports on Austrian television indicates that very little shopping activity takes place between loyalty partners and consumers.
    Mr Purcell mentions compliance procedures and legal infrastructure put in place and stresses that these procedures are put into place “PRIOR” to opening in any country.
    These procedures that Mr Purcell mentions were not put in place in Australia prior to Lyoness selling memberships.
    Lyoness were selling Premium Memberships where consumers would generate 13 units across 3 matrix’s in the Australian market for a number of months promising early members a share of customers that Lyoness would acquire through media advertising campaigns.
    In Australia Lyoness had no loyalty partners or vouchers to down pay units against leading up to the official opening of Lyoness on April 1st 2012.
    It was advertised through Lyoness presentations that early members would share in customers acquired through advertising campaigns and that these customers would create shopping units every month.
    Thousands of Australian consumers paid Lyoness $3000 or more to become Premium Members expecting to receive income from the customers promised which Lyoness denies the promised benefits from these advertising campaigns.
    The Australian Consumer Competition Commission have received enough complaints to launch a full investigation into the ways in which Lyoness is conducting business.
    It would seem that Mr Purcell chooses to ignore or withhold such information in his comments rather expose these facts.
    Final note. We would seriously question Mr Purcell’s EXPERT opinion in future posts, it would be of great interest for Mr Purcell to reveal what is rank is in the Lyoness program.

  6. You are absolutely correct in your concerns for Lyoness. I have been in MLM since 1969 (Dare to be Great – Nu-Skin – Amway etc.). I went to a Lyoness opp meeting and realized that once they become successful in the US, they will be shutdown because of the comp plan.
    They have less than 100,000 in the US program. The regulators will be drooling to shut them down. Once they get on the AG’s radar, gone and gone.
    They cannot sell positions and solicit investments!
    Companies have been shut down for much less.
    “Mainstreet Alliance” had a similar plan and the owners were arrested in Virginia back in the 80s.
    The religious nut, Jerry Falwell had a shopping/savings program that was shut down.
    MLM can be profitable, but Lyoness is a DEAD END

  7. Nobody is mentioning that when you buy down the units and it matures, then you get shopping credit and not cash. The money has to be eventually shopped with the merchant in the network. This helps the merchants and the system continues.

  8. 🙂 Pablo, thank you sir for the offer. However, in reading through so much already it does seem people have at least felt they have lost money.

    But without a doubt you have added value to this conversation and that is what the overall goal is. To help provide info that can help people seek the answers they need.

  9. Troy
    Give me 15min and I will explaind you everything and you wan’t see any red flags in Lyoness compensation plan as Lyoness is the only company I know where is impossible to penny, how the hell it can harm any law, if some one is not able to explain program and work only on the hypo actions then you will get where you are miss understanding and confusion.And belive me you don’t need months of studing different materials only what you need is about 1h with right person this is it.
    The program work exactly the same in all of the country’s and continents America is not exception even if there is some litel adjustment done to GTC to suit local law as there is nothing in the program what can make it band in an country as the IDEA is so simple and old as whole comerce.
    Regards
    Pablo

  10. Pablo,

    Please understand I am not focusing on Lyoness International. My focus is on Lyoness America and if the compensation structure is legal based on current laws.

    If I were the only one to bring up the concern, it would not be important. But since many have issues concerns, basically because the comp plan is so out of the box, then we must address the concerns.

  11. Pablo,

    I fully understand where you are coming from. We took months and reviewed many videos and document and talked with folks about Lyoness America.

    Any other division of Lyoness is not our concern

  12. I am always an optimistic guy. I believe most direct selling companies do not enter the space to do harm, but to provide longevity for their employees and field force.

    But when those companies are outside of the norm, and there are red flags then we need to address them.

  13. By the way that the last post you look very friendly and optimistic guy way you take role in such horrible case without any evidence or prove, your expert could be the best networker in the world but unfortunately hi don’t have conception what is Lyonees and for me hi can’t be presented as any expert on this case.After seeing his explanation of compensation plan “absolutely nonsense”, but you spell the milk so now you have to drink it.
    Once again thanks and waiting for your visit

  14. I really don’t want to bring it forward but personally would recommend you to check the case befre you publishing any thing like this I have people traveled all the way from Asia to Europe to check if the Lyoness it really is this what is stating to be before they make any decision, and I don’t know much about the American low but after you will see how it work in many country’s in Europe you want post any think like this for sure if your intention is to help people to understand not practise black PR we call it in Europe.
    Because I don’t think that American low is more strict then low in some European countries like German, Switzerland and many others wher Lyoness have already successfully operating and archiving fed back from national quality research institution even if somthing need to be improved at some field I’m sure Lyoness will do it professionally and you will be reassure as well after coming and seeing this on your temporally blinded eyes.So warmly inviting you to come over to Austria can be your quide to the new world of Lyoness Shopping Comunity my Dear Troy.

    A Lots Of Success
    Pablo
    If want my contact details for invitation later please give me your e-mail
    Thank

  15. Dear Troy
    I don’t know you personally you may be really nice guy, but there must be some risen that you are fighting as lion for some one statement regards Lyoness it could be personal or business related I don’t know this is somthing only you know and hoppe is only your good intention hiden behaind this.My previous post was about binary software behinde Lyoness accounting program which is similar to dose used by banks and different financial institution to calculate they provision etc etc… But this was only technical details which dose’t Mean to much for ordinary people and don’t want to focus on this. I don’t know if you and your expert know that Lyoness have achive to very important certificates I’m going to publish them belowe:

    In 2010 Lyoness was successfully audited according to the ISO 9001:2008 certification. The series of standards starting at ISO 9000 document the principles required for quality management measures. In the case of Lyoness, the issued certificate proves the company has outstanding quality management and standardized workflow structures in all departments.

    The ISO 9001 standard aims at standardized terminology. Terms such as requirement, customer satisfaction, product, process, system, quality and quality improvement are defined internationally and are therefore comparable. As part of the ISO 9001:2008 certification, certificates were granted for all national companies existing at the time of inspection as well as the Child & Family Foundation and the service companies Lyoness Management, eBiz and Dataservice.

    In 2010, Lyoness was inspected by TÜV Rheinland and awarded the certificate “Service-tested shopping community with proven price benefit/CASHBACK” for the service companies Lyoness Management, eBiz, Dataservice and the national offices Lyoness Austria, Lyoness Suisse and Lyoness Deutschland.
    TÜV Rheinland verified the promised price benefit for Lyoness members and objectively certified the benefits to be accurate. This independent and voluntary inspection of Lyoness included, among other things, an analysis of the quality management processes and member satisfaction as well as the drafting of contracts with trade partners and end users.

  16. Well, it seems you did not listen to the video, or you missed the total focus. Maybe if you read though the comments you could get a better grasp on things.

    1. This is to raise awareness and awareness only of possible issues in the USA regarding the compensation structure of Lyoness USA.

    2. The mention of the current regulators and what they are doing is to also raise the awareness that actions are taking place and we as a profession and especially the leadership at Lyoness America need to be proactive in responding to the accusations raised by the author of the document.

    3. You are 100% I did liken the Lyoness America issue to that of Zeek Rewards. When concerns were raised about Zek Rewards, they took way to long to address the issues and in the end regulators took control.

    If Lyoness America or folks like you want to shoot the messenger, instead of looking at each accusation and addressing them (internally in fine), to make sure there are no issues, then Lyoness America could end up just like Zeek.

    4. I never alluded to any investigation. However, in most cases when regulators get involved the public will not know it, until the regulators shut down the company… Zeek Rewards is a great example again!

    5. ROFLOL… Seriously! MLM Help Desk, covers more positive info surrounding Network Marketing than critical info. I am not sure you can say that about the National Enquirer… Are they still publishing?

    Folks in the 21st Century turn to TMZ more than the National Enquirer.

    Well, not that we are past the pleasantries, let’s skip the Red Herring about me, and focus on the facts.

    Exactly what part of the accusations do you disagree with, and can you add value to this conversation by supporting your facts or perspective with educated conversation?

  17. I am not sure if they have filed a complaint. In reality I believe there are many avenues that should be taken long before a complaint is filed with regulators.

    But time will tell!!!

  18. Troy,

    I hope your expert source has filed a complaint with the SEC. It would serve both
    sides of this debate well. It would either establish Lyoness as a credible business or shut it down if it isn’t. I’m assuming this expert source knows that there is an anonymous whistleblower program.

  19. This article is as an example of horrible journalism. The title “Lyoness America Violating Pyramid, Ponzi, Business Opportunity & Security Regulations?” is focused on Lyoness, and it continues with mentioning an document the author received titled “Notification of Lyoness America violation of Pyramid, Ponzi, Business Opportunity and Security Regulations.” Later it states “Currently the Financial Fraud Enforcement Task Force, is moving throughout the USA closing down and getting solid convictions and settlements for the consumers.” Notice how general this statement is, it did not specifically name Lyoness. The authors intent to instill false fear is made clear in the very next statement. “If Lyoness is found to be a Pyramid or Ponzi…” and he proceeds to liken Lyoness to the Zeek scam.

    The author was very careful no to state “Lyoness is under investigation”. That is because there is no evidence that any U.S. agency is investigating Lyoness America.

    MLM Help Desk is like the National Enquirer for the MLM industry.Yellow Journalism at it’s best.

  20. I appreciate where you are coming from. There are times when we do make public a source of information, and at other times we do not.

    This is common in journalism because confidential informants have their own reasons for staying out of the lime light.

    This is one reason, we are very careful, what information we provide. I am not a big fan of anonymous posters, or even information that has no merit.

    In this case, there is enough 3rd party confirmation on some of the points raised, I made the decision to take it public and start a real conversation, not just a bunch of negative crap.

    As you read through the comments on this thread it is easy to see that new concerns have been raised, and some of the points made have been discredited.

    I have also mentioned in the comments, why at this time the CI, does not want his name made public.

    Now, as for “why you should listen”, that is a great question.

    It is not about you listening, it is all about you thinking! If we provide some critical thinking to the issues raised, and dig deep enough, then I believe as adults, people will be able to gather enough information to make informed decisions on if Lyoness America is a company they want to use as the vehicle for their own home business.

    I also, believe that if the leaders running Lyoness America reviews this information, they will be able, with the guidance of their legal and consulting team, which issues are important and which are not, and make the corrections needed to protect their business in the USA.

  21. I think you need to disclose the name of the person who gave you the letter.
    Why does he/she not want to be named? If they are not named why should we listen??

  22. Pablo,

    I can’t follow all of your comment, so if I answer anything that you do not feel makes sense, please give me some latitude in your response.

    1. Please understand this article is NOT about Lyoness International. It is about Lyoness America. So an article talking about the Lyoness business model doesn’t help in figuring out if the compensation structure is legal in the USA.

    2. I do not understand your statement on binary’s and banks. Please explain! And you are correct it may be far over my head. But unless I can figure out what is has to do with American law, I will not know. And I do know a little about banking and securities laws in the USA.

    3. I am pretty opened minded and coach leaders to think outside the box… but never outside the laws! And I am not sure you realize, I did not write the document, I published it, and raised some additional questions and concerns.

    4. Not sure what my moving or understanding Austria laws has to do with bring up concerns on if the compensation structure of Lyoness America is legal or could cause an investigation with regulators.

    I look forward to your clarity.

    Living AN Epic Advenure,
    Troy

  23. Thank you for taking time to share your thoughts and insight.

    I would like to ask several clarifications.

    I do see your point on the different uses of words. However, in a regulatory inquiry or worse charges been presented, the very words “unit” or “profit center” would be a focal point of the regulators concerns. Since “unit” by definition is the center point of a calculation. And we are talking about “potential profits” trying to cut hairs on this one would not matter in a court of law.

    I do agree that if the words the author used changes the context to enhance his position, then you and others should be the first to set the record straight.

    Also let me point out the document is NOT an article, it could be called an outline of allegations.

    Let me ask some additional questions in regards to what you wrote.

    1. That is clear, but how many do join for free, and is this the major focus?

    I understand the estimate, but can we get a solid figure? The reason I ask is because in the “Burn Lounge” case low percentages were used against the company. And we are seeing this also being used against Herbalife.

    When a down payment is made, does this truly trigger commissions?

    Lyoness America is the ONLY focus on this editorial. The USA Regulators do not have concerns internationally only in protecting folks at home.

    2. The term “buying in” is a phrase that will be used by regulators to determine if the company is legal or not. So the use of it in the document is valid.

    Are commissions triggered from the “buy in” aka “down payment”?

    Regulators would ask the following question in some form or another… “Is it discouraged but still allowed?” If so then the leadership in the company could be held responsible if this action is potentially harmful to the majority who can’t afford the “topping up”.

    Either the company outlaws it and terminates anyone they find doing it, or they can be held responsible.

    If commissions are paid on the layaway before it is totally purchased by the end user, then regulators may see this as an issue. Paying commissions, when a product was never delivered to the end user could be seen as a ponzi or pyramid.

    We can call it a “down payment” “RVP Bids” or anything else we want to call it. If it opens another unit where potential profits can be earned from “down payments” or anything else then it may be seen as stacking inside of a money game based on the interpretation of the USA regulations.

    Again, are commissions triggered to people in the compensation plan with the down payment? If so then the author does bring up a valid concern.

    Pyramid laws may be funny to you, but to those who have had their company shut down due to the regulations inside the USA, and then had those same regulators come after then WILL NOT!

    And since “to” is a fraction word which can be used to indicate purpose, it might fit in supporting the overall direction the author is going…

    What English language is the challenge? U.K. Or America?

    If you want the laws don’t challenge the author, read through my Zeek Rewards documents and Burn Lounge documents here and you can read some of them for yourself.

    Remember, it is not the author who will need to defend himself in court. If his allegations are correct, and the current compensation structure were to trigger an investigation (even if Lyoness was find clean in the USA) momentum would come to a grinding halt.

    It is always better to address the issues with legal counsel or a consultant and fix any gray areas, than to allow distributors to be devastated.

    I have covered ponzi and pyramid laws for years in this community.

    3. Hmmm… The Business Opportunity Rule is one law with several moving parts. Again I personally have covered it here in the community, and is is the hottest topic right now inside of direct selling due to the Herbalife situation.

    And since it also covers independent professional such as yourself, it might be a good read.

    Also, respectfully, why are you throwing all the Red Herrings into your comment? It is not (at this time) the author who as to defend his allegations and concerns.

    It makes more sense for reps or even the company to regard what is written and make sure Lyoness is well inside the current regulations from a Federal level down.

    And yes, there is a high-point threshold which moves a direct selling opportunity, into a business opportunity where the laws and regulations are far more strict. There are also State level laws as well.

    4. Again being “seriously discouraged” will not protect the company from regulatory discipline. When something is “discouraged” there is a reason. And when it involves peoples lives, it had better be more than discouraged because regulators will focus in on WHY IT WASN”T BANNED and not just “discouraged”

    As an example… Zeek Rewards only allowed $10K per account. Yet, many people had more than one account and “invested” “bought in” etc. to more than one “account” “profit center” “profit unit” and the SEC sited this as an issue.

    I have seen and even been presented the $30K presentation. So maybe this is only shown to people where the Lyoness rep knows or assumes the prospect can place a “down lament” of five figures?

    Again, the author doesn’t need to site regulations or case law. He only has to raise the question, it is up to you, the company or prospects to investigate and find an answer.

    If there is an issue, and after fully investigating the Lyoness income opportunity a person feels they made the right decision, then at the end of the day, they will only have themselves to give credit, win or lose.

    Now for current Lyoness reps, it might be good to get to know the laws, and I might do a follow up editorial and provide you those resources if it will help.

    5. The author is suggesting that “opening” placing a “down payment” and paying out on it, “might be a violation.

    If the business volume created is from a “down payment” based on some proposed “future” event, which may or may not take place…
    Example: Someone decides NOT to pick up the product from layaway (but does’t ask for a refund) and commissions have been paid. It will raise red flags and regulators would ask about it.

    6. 🙂 Laws and Regulations are NEVER “technical incorrect.” So in determining if the author is “technical incorrect” we would need to have a basic understanding of the laws and regulations.

    Once we have that basic knowledge, then we can love to the next level in the equation to determine if the phrase “buys units” instead of the use “down payments” are diabolically opposed and could change the conclusion of the argument.

    In this case if “down payments” are classified as “volume” and commissions are triggered on those “down payments” before an actual product or service is bought and delivered to an end user, then I would conclude that this could trigger red flags and raise concerns with regulators.

    I would ask where the majority of the commissions come from and what is promoted as to how we determine if his statement is misleading.

    In every presentation I have seen from the company to the field, the highpoint for the money story is to recruit more people into the network.

    Since this is the basis of all direct selling companies and is what causes them to grow, I have no issue with it. But if the majority of commissions which creates the money story is coming from the commissions generated from “down payments” a person uses to join/active/qualify for commissions, then this could be seen as a violation, and be called a “pay to play” money game.

    I am glad to hear the company is “attempting to suppress the “returns” But that is NOT enough! PERIOD!

    If the company isn’t willing to create a full blown dissertation condemning the actions, and making it clear WE WILL TERMINATE, and then DO IT, they will not be protected from regulations!

    Talking about ANY ROI (Return On Investment) in any form is against ALL federal and state laws unless the company and the individual holds State and Federal Security Licenses, and have registered their business as an investment business.

    Now you are doing what you propose the author did… not give the whole story 🙂

    Lyoness America does have an office in New York, but the management and operation is based in Miami Florida.

    Many companies use a business address in the Empire State Building and set up virtual offices.

    I do agree there is plenty of propaganda inside the document, and also from the company. Propaganda does run both ways. 🙂

    You could be right. Or it could be that Miss Silvio, just doesn’t use the title publicly because she understands titles don’t pay the bills!

    You have raised some great questions, made solid points of contention, and without a doubt added value to this community and this debate!

  24. The author misused several Lyoness phrases and terms and/or
    replaces them with his own words or phrases to convince readers of his point of
    view. An example of this is the use of the phrase “profit center” where it
    should say unit. The article is riddled with unclear statements, accusations,
    slander, ignorant statements, inaccurate information, and on top of that, poor
    grammar and poor sentence structure.

    I will take each number at a time and respond with my
    thoughts, clarifications or the facts.

    1.
    “Lyoness does allow someone to register for free
    and through and referrals to earn a profit center.”

    This sentence is poorly constructed and unclear. Based on the authors repeated
    use of the phrase “profit center”, it sounds as if the author is stating that
    you must refer individuals to earn a unit. This would be incorrect.

    “A review of Lyoness’s actual record will
    demonstrate less than one percent of the qualified distributors started this
    way.”

    Assuming that the author is referring to
    shopping to earn a unit vs. down payment, I would agree that a minority shopped
    their way to their FIRST units. I, however, based on my knowledge, would be
    very surprised if it is “less than one percent”. I would estimate at least five percent
    or higher shop their way to the first unit. Furthermore, most IBR’s who do use
    the down payment method to earn the first units do shop and earn more units
    from shopping.

    Many IBRs know that United States has grown
    at an accelerated rate vs. the rest of the world. There are stories of people
    in very poor countries that have done extremely well in Lyoness and have done
    so by redirecting spending and shopping to their first unit. In Europe, and in poorer countries, I would
    suspect that the percentage of people who shop to their first unit would be
    much, much higher than here in the states.

    “In fact, there may have never been one.”

    Seriously? The author started a sentence with
    “In fact” and did not follow up with the rest of a sentence to state an actual
    fact. The phrase “In fact” should never be followed with “may have”. The author clearly suspects “there may have never been one.” and should of
    stated that they suspect instead of stating it as a fact.

    2.
    “Distributors start by buying in with a minimum
    of $225”

    The use of the words “buying in” are intended to steer the reader in his point
    of thinking.

    “Lyoness calls this a down payment on future shopping. In fact, no shopping is
    done with that money.”

    This is false. The IBR always has the option to “top up” the payment and in
    fact shop with the money used for the down payment. However, I will go on record of saying that
    the practice of “topping up” payments is somewhat discouraged as it does mean a
    loss of some potential benefits.

    “No product or service is
    delivered for that money”

    This is false.

    The author clearly does not
    understand the idea of down payments and how they work. There is an official Lyoness slide for that
    (Sear’s refrigerator) maybe he didn’t see. Anyway, lets use a different example
    of something we may be more familiar with and that is layaway. Take a close look at Kmart’s layaway plan.

    http://www.kmart.com/layaway/sbh

    Note the down payment and the
    service fees (outside the current promotion period). There is no product
    delivered for that money. Both Kmart and
    Lyoness are providing a service. Kmart
    advertises “today’s low price, tomorrow’s low payment”. With Lyoness, the benefit is provided in the
    form of an accounting unit.

    “All the distributors do get are
    three (3) stacked profit centers…”

    Again, the phrasing is steering he
    reader to believe something incorrect. The money is in fact a down payment. The
    author clearly does not understand the concept of down payments, layaway,
    deposits, etc. To be clear, the use of
    the word “All” is intended to minimize the down payment. Reminds me of the movie The Jerk with Steve
    Martin. In fact, the 3 units are not “all” the IBR gets. The money does indeed remain their down
    payment waiting to be topped up.

    “This is buying into an
    opportunity and I believe is in violation to the pyramid laws”

    For some reason the phrase
    “pyramid laws” strikes me as funny. I can’t help but think of Egypt and that
    the Pharaoh is going to imprison me for looking at him the wrong way.
    Anyway, I believe better grammar would
    be “of the pyramid laws” instead of “to the pyramid laws.” Phrases and grammar
    aside, in my last paragraph I reestablished that down payments are in fact down
    payments, therefore one is not “buying into an opportunity”.

    I challenge the author to 1)
    master the basics of the English language and 2) State specific laws. Quote and
    cite them! The author can believe his opinion all day long, but without citing
    laws, the reader has no opportunity to
    determine what if any pyramid laws Lyoness is in violation “to”.

    3.
    “This is
    a total of $525 minimum required to start in Lyoness America and may be in
    violation of many state and federal Business Opportunity laws. “

    So many he didn’t name or cite a single one? We can only
    assume the author is referring to some law somewhere that says the entry for an
    opportunity can not be over X amount? I am just guessing here, as the author is
    not at all clear.

    4. “They are told
    that as the profit centers earn all of their cycles and are paid off, the $3,000 investment in profit returns will pay
    a $383,000 returned on investment.”

    I have never heard the figure $383,000. Admitingly, I have
    heard and know some are stating approximately $30,000 for a unit to go through
    the system. This practice is seriously
    discouraged by and taken seriously by Lyoness. The more intelligent IBRs do not
    share any of these numbers as they know it will take many, many, many, years
    and a whole lot of shopping for a unit to go through the system. Most IBRs
    stick with sharing the approved webinars and official powerpoint presentation.
    It is only commonly shared that a $75 AC1 unit becomes $675 in cash or
    credit. It is not common for IBRs to
    make “return” claims of $30,000 and not at all common to make “return” claims of $383,000.

    “This may be in violation of both pyramid and business
    opportunity laws”

    Again, the author did not cite the laws.

    5. “Lyoness has a uni-level structure. In the uni-level
    distributors are paid an amount based on the number of new profit centers are
    sold. This should be a blatant pyramid law violation.”

    So, is the author suggesting that uni-level is unlawful? Is he suggesting that
    creating business volume and getting paid on business volume is unlawful? No, I think it’s clear that he is stating that
    the combination of uni-level and getting paid on business volume is a “violation to the pyramid laws”. Hmmm that would make lots of opportunities
    unlawful.

    6. “Lyoness has a Volume Bonus that is paid based on rank
    achieved by have various quantities of profit centers sold. This should be a
    blatant pyramid law violation.

    A common theme I did not bring up in point 5 that this one
    share is his use of the phrase “profit centers sold”. He is suggesting that one
    “buys units” which is technically incorrect as they are down payments.
    Furthermore, it suggests that volume only comes from down payments, which is
    also incorrect. Some volume does come from non down payment shopping.

    7. 8. & 9
    responses will be posted later.

    Authors closing argument

    “The company has been making every attempt to suppress this
    information.”

    And what information is that? Yes, it is true the company is making ever
    attempt to suppress IBRs from claiming returns of $383,000 or $30,000!

    Also note the attempt of propaganda like statement including
    the phrase: “suppress this information”.

    “They have threatened me with lawsuits and TRO’s.”

    Well maybe the author should work on getting his facts
    straight and talk intelligently first.

    “The company is based in Austria”

    That is true, however Lyoness America is based in New York
    in the Empire State building.

    “Mario Hoffman, Oria, Mario’s wife and assistant, Dr.
    Silvio, the company top distributors who launch the USA operation are all
    believed to be from Austria and could be flight risks.”

    This is more propaganda by the author. It is designed to defame the character of key
    individuals and to instill fear.
    Furthermore, he is confusing individuals, for example there is no “Dr.
    Silvio”. Silvio Spangl is not a doctor, however another leader in Lyoness, Dr.
    Stephanie Nelson is a doctor. It is clear that the author is barely familiar
    with these individuals and should not be attacking their character or accusing
    them of being “flight risks”.

  25. Michael,

    Thank you sir for providing additional personal insight.

    Just two quick questions for clarity on my part…

    1. What compliance procedures are you referring in regarding to the Lyoness America?

    2. What legal infrastructure in regards to Lyoness America?

  26. 🙂 Well, I did not say the expert didn’t have a name. I did state their name was not provided at this time.

    And, there is no reason to sling any mud. However, there is ALWAYS a reason to notify the public when there are two sides of an issue.

    If we only look at the positive propaganda provided by companies, then any decision made is an uniformed one.

    If folks like what Lyoness has after reviewing he critical side and weighing the risk, then so be it.

  27. Interesting your “expert” has no name. If you sling mud you need to take responsibility for it. Looks like ignorance on fire.

  28. So Troy, Who is the ” a very well-known direct sales, MLM, Network Marketing expert?” It looks like someone who does great work. I can think of only one person who is that detailed.

    Are we not saying to protect that expert?

  29. Whilst I may appreciate there is always value for independent journalism and people keeping watch over the best interests of both consumers and Distributors, and whilst I agree with nearly all the remarks that the gentleman in the video has said about the values of bona-fide MLM programmes, what must be stressed about Lyoness is that their comp plan is very sophisticated and therefore harnesses potential for less honorable individuals to mis-sell.

    During my own 2 year involvement with Lyoness I have noticed that the company have put in “breaks” and “stop signs” alerting people about purchasing “units”, ensuring that they have read the Terms and Conditions, the Power Plan and that they fully understand what it is they are doing BEFORE making any purchases (very much in line with the strict criteria of financial services these days), all these good practices in place to help improve their own high standards with a view to delivering a ” quality” MLM designed to create new wealth to the educated mass market.

    Final Note. I am an “Expert” in network marketing, have been in this industry for over 25 years and have built some of the largest UK businesses, worked with the DTi in government as well as with the UK DSA as well as having corporate positions with MLM companies, due to the compliant procedures as well as legal infrastructure put into place PRIOR to opening up in any country, in my view Lyoness are working entirely within the guild lines of network marketing and showing themselves in the main to be an exemplary network marking organisation.

    Michael Purcell Lyoness member UK

  30. hey Troy…. When are they going to get ACN ? When I finally got my money back in 2/11. thanx to , they 14 attorneys ( including 6 former AG’s) on their staff ) and insider told me that they were in bed with the NC AG…..can’t believe that they ahve made it for 20 years !

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