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Lyoness and Lyconet A Pyramid Scheme In Norway

Lyoness and Lyconet A Pyramid Scheme In Norway

The Lottery Authority in Norway is a government agency responsible for illegal marketing, illegal gaming and pyramids.

The next letter is send to Lyoness, and underlaying divisions: Lyconet and CashBack World (Google translation):

Notification of decision sent to Lyoness.

On 11 January 2018, the Lottery Authority has sent notice of a decision to terminate Lyoness’s operations in Norway.

Notification of decision sent to Lyoness Notification of decision is addressed to Lyoness Europe AG and Lyoness Norway AS, but will also include 150,000 Norwegian participants and 1,000 loyalty companies included in the Lyoness sales system in Norway.

Illegal pyramid-like sales system

Based on the number of received tips in 2016 and 2017 and the content of these foundations, the Lottery Authority has assessed whether Lyoness is an illegal pyramid-like sales system pursuant to section 16, second paragraph, of the Lottery Act.

In the assessment, we have assumed that revenues from Lyoness’s business in Norway are mainly from the acquisition of participants, and not from sales or consumption of goods, services or other benefits.

Lottery Authority’s conclusion

In the notice of decision, the Lottery Authority concludes that Lyoness’s business in Norway is an illegal pyramid-like sales system pursuant to section 16, second paragraph, of the Lottery Act.

We have paid particular attention to the fact that Norwegian participants in Lyoness do not receive or consume goods, services or other benefits from the sales system that correspond to the value of what is paid when paying for them.

As a result, the participants’ payments to Lyoness are considered as consideration to participate in a pyramid-like sales system.

The income of the company and individual participant comes almost exclusively from the replacement of new participants and their payments to Lyoness, and not from sales or consumption of goods, services or other benefits.

In a letter dated 11 January 2018, the Lottery Authority has announced that we will make a decision that Lyoness must cease all its activities in Norway.

The notified decision implies that all referral of participants and loyalty companies to CashBack World and Lyconet, and all sales and use of benefit cards, discount coupons, customer card shares, gift cards, marketing materials, seminars and other product in the business may cease.

The Lottery Authority’s notice of decision is based mainly on the information received from Lyoness in the matter.

Further treatment

Lyoness has a four-week deadline to object to the decision being notified, or the reason for the alert. The Lottery Authority’s further processing of the case is due to Lyoness’s feedback.

About Lyoness

The Lyoness Group is dividing its three business areas into two brands: The Lyoness brand encompasses the shopping community and the loyalty program.

Their target groups are consumers who want to save money by shopping with Lyoness (Cashback) and loyalty merchants who want to use an international multi-sector loyalty program. The Lyconet brand encompasses all network marketing activities of the Lyoness Group. Its target groups are self-employed people and companies.

The Lyoness Group is currently active in 46 countries on all continents. Over 4 million members take advantage of the Lyoness benefits at over 40,000 loyalty merchants around the world. More at www.lyoness.com.

 

Get more information, fact and figures about LycoNet - Lyoness, click here for the LycoNet - Lyoness overview.

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