Lyoness: Scam or not?

[Stefmyster]

Hi Guys,

 

So a few of my friends/family members have been approached with the Lyoness plan.

 

Then basic idea being is you buy a loyalty card for R35 and you get 1% cash back on all purchases made at places like Dischem/woolies ect. If you recommend others, you get 0.5% of any purchases they make.

 

Small percentage but considering what you spend on groceries it can add up. Now, is this legit? The fact that you only pay the R35 makes it a fairly low risk thing to try but even then it stinks of ponzi scheme to me and there are a few reason why:

 

- I have never heard of it, Dischem and Woolies never promote it ect...do they even know that their name is being linked to this(something I am in the process of finding out)!?

- The income figures don't add up(supposedly 50k a month if you have 50 people and if they bring in another 250).

- You can pay R20k to get a better % cash back(Classic ponzi scheme)

- The guys doing the pitch use things like we also give to Charity, we are religious ect(Things they know would appeal to their older audience to the point where they no longer question their motives).

 

So I think it is clear that I don't buy it but there is a lot of conflicting info on the web so I would like to hear it from people that have tried it? I also realize if you're part of the ponzi scheme my poll might be useless but all hubbers are good people right?

Edited July 22, 2013 by Stefmyster

[DR ◣◢]

So it's a pyramid scam scheme

[Sidewinder.]

It's great! Lets undermine our fragile economy together

[Skylark]

Business's don't generally mention charity and religion as part of their operating schedules, that's a charity - so you'll be giving to a charity perhaps?

 

[schizo]

When I type lyoness into my search bar and the second auto suggestion that pops up is "lyoness scam" it just might be a scam..

[Stefmyster]

I have no intention of joining as everything about it is a scam to me. It would be good to hear from someone that has used it/burnt their fingers with it.

 

The people that think it sounds just wonderful just don't seem to want to hear my reasoning behind it.

[Wyatt Earp]

Amway with a fancier name.

[RockCoach]

Danger Dassie has some inside info

 

Knowing who is running this scam, I would stay very far away.

[Wyatt Earp]

' "Are you interested in earning thousands of francs? Join Lyoness." announces *Angelo, with an assured voice and a charming smile. The handful of onlookers, gathered at a hotel in La Chaux-de-Fonds, listens to this modern-day prophet open-mouthed. Armed with a polished PowerPoint, this thirty-something presenter gives the recipe for his miracle solution: join the Lyoness community of buyers. Native to Austria, the company claims to have attracted two million people in twenty-three countries, including 12,000 in Switzerland. It promises its members to get discounts, to recover money on their purchases, or to even earn tens of thousands of francs in cash.

Members can choose: to make money slowly, quickly hit a jackpot, or both. The first method is to acquire a membership card that Lyoness says is free. In reality, it is obtained against the purchase of CHF 450 of gift vouchers in partner companies and offers 1% to 6% discounts from these brands. In this network, which is poorly developed in Western Switzerland, there are small traders, such as service stations Jubin in Jura or Boky, a Chinese restaurant in Lausanne.

A robust approach is applied to converting people into business partners. By investing 3,000 francs in the company, members can withdraw 25,000, provided in turn they recruit a number of investors. That February night in La Chaux-de-Fonds, we will not know exactly how many, such is the apparent complexity of setting up the system. Presented in diagrams, Angelo is excited about the system’s miraculous formula. "It's very complicated," says Josiane*, a lady in her sixties. "No need to understand, it works by itself," interjects an associate of Angelo. "It's fantastic", she says finally. Too fantastic.

Complaints of fraud are springing up everywhere, including in France, Austria and Switzerland. "Very often, people get a few hundred francs, but never more, said Eric Breiteneder, an Austrian lawyer in charge of more than 50 cases related to Lyoness. To our knowledge, nobody has got the famous 25,000 francs."

The problems go back to the heart of the system. "The return of money from the entry of new investors reflects the principle of the Airplane Game," said Fabien Rouiller, a lawyer in the The Commission on Lotteries (Comlot). Also called a Ponzi scheme or pyramid selling, the system is based on the fact that profits are derived from recruiting new members, and not a sale. As long as new members are available, it works. Once the resources are exhausted, everything collapses, leaving those at the top of the pyramid with the most money.

How has the company survived until today? "The law explicitly prohibits this system”, explains Yannick Buttet from the commercial enforcement authority in Valais. “But in addition to the Airplane Game, Lyoness can get discounts. The combination of the two confuses the issue. We are in the grey area. It's very clever." The Austrian Eric Breiteneder agrees: "To launch a trial is often more expensive than the amount invested, hence the longevity of Lyoness (founded in 2003, ed.)"

The damage being caused by Lyoness exceeds the monetary losses, tearing apart families and friendships. "The group works on sponsorship”, attests Anne-Valérie Pinet, a French lawyer who represents the first complainant. “Members are trained by relatives, who are not wary of anything. But once the scam is revealed, the links break." From the outset of the proceedings, the lawyer and his client were subject to threats from the victim's relatives.

Emotion is intensified because of the close relationships that are integral to Lyoness. "These people are fanatics or religious," says Eric Breiteneder. Rituals, a dress code to follow – wearing badges is obligatory - Lyoness regularly organises international meetings. "It sounds like a great mass," said the lawyer. Dance, song, it is a moment for worship. The founder and CEO of Lyoness, the Austrian Hubert Freidl, also engages in the show. Always present in the company's communications, the balding orator is the subject of boundless admiration. "This is our benefactor," said Angelo. Little information is known about the guru. His two partners, Tzvetan Streif and Hubert Wagner, come across as experts in casino games and chance. The three chair the mysterious Lyoness Child and Family Foundation. "This foundation is used to move money from one country to another. But nobody really knows where his money comes from and where it goes," said Eric Breiteneder.

The international headquarters of the company is based in Buchs (SG) "for tax reasons," according to Angelo. But Eric Breiteneder emphasizes its other function: "All contracts of overseas members are signed with the Swiss entity. Swiss members sign a contract with the Austrian group. The reason: they seek to complicate legislative procedures in the event of a trial. "A Swiss firm has received a complaint from former employees of the firm who would have had access to documents proving the fraudulent activities of Lyoness." Today, the law does not allow the Swiss authorities to actively fight against the company. But the State Secretariat for Economic Affairs [sECO] will soon be able to get involved," says Fabien Rouiller of Comlot. From 1st April, the change in competition law will provide SECO with new legal powers, which will finally allow it to seize the files. When contacted by L'Hebdo, SECO said it could not rule before the new law comes into force. But the lawyer in charge of the Swiss case revealed: "Lyoness is frightened, and is seeking to move its headquarters to Luxembourg before the deadline." Lyoness was contacted several times at its bases in Switzerland and Austria, but refused to respond to our questions.'

Corporate Frauds Watch (2012)

[Stefmyster]

Thank you for the feedback guys. I'm hoping common sense and some of the facts I could gather will keep people from doing something stupid.

 

It is amazing how a logical, well grounded person can become incapable of thinking straight when the prospect of easy money pops up.

[Madscot]

No scam! if you join you get money back as promised. Please note that the 'scheme'has been looked over by the Consumer commission. sars & Treasury.

For those who just want to shop & not develop a business out of it, it costs nothing. Registering is free, and you get your cash back from your shopping. You don't put any money in so how can this be considered a scam or pyramid?

[jimmycool]

An easier way to get more than 2 or 3 percent back is just buy 1 thing less when you go shopping - no hassle, no swiping cards etc. Or just choose 1 brand over another that is slightly lower priced ie R97 v R100 then you have saved 3% wohoo!

[DawieO]

What kind of discount on an electric unicorn? Or a perpetual motion machine?

 

Scam.

[Sharkie 2]

An easier way to get more than 2 or 3 percent back is just buy 1 thing less when you go shopping - no hassle, no swiping cards etc. Or just choose 1 brand over another that is slightly lower priced ie R97 v R100 then you have saved 3% wohoo!

I want money back on things I have purchased...I don't want to save money...hahaha

[Madscot]

Hi Guys,

 

So a few of my friends/family members have been approached with the Lyoness plan.

 

Then basic idea being is you buy a loyalty card for R35 and you get 1% cash back on all purchases made at places like Dischem/woolies ect. If you recommend others, you get 0.5% of any purchases they make.

 

Small percentage but considering what you spend on groceries it can add up. Now, is this legit? The fact that you only pay the R35 makes it a fairly low risk thing to try but even then it stinks of ponzi scheme to me and there are a few reason why:

 

- I have never heard of it, Dischem and Woolies never promote it ect...do they even know that their name is being linked to this(something I am in the process of finding out)!?

- The income figures don't add up(supposedly 50k a month if you have 50 people and if they bring in another 250).

- You can pay R20k to get a better % cash back(Classic ponzi scheme)

- The guys doing the pitch use things like we also give to Charity, we are religious ect(Things they know would appeal to their older audience to the point where they no longer question their motives).

 

So I think it is clear that I don't buy it but there is a lot of conflicting info on the web so I would like to hear it from people that have tried it? I also realize if you're part of the ponzi scheme my poll might be useless but all hubbers are good people right?

A correction - there is no charge at all for your card, or to register. Feel free to PM me for any further info.

[Tuxstir]

Tried it, tested it, got my money back, yes it looks like a pyramid scheme, but you not investing, it's simply a loyalty card just like your pick n pay smart shopper card is, you can just use it at more places and you get cash in your account, and if you sign up other people you get a portion of there spending, it's free to join, use it or don't but scam it is not.