Lyoness still a pyramid scheme in Italy, fined another 3 mill

Italy’s Competitors Authority has as soon as once more discovered Lyoness to be an unlawful pyramid scheme.

The corporate has been issued with one other €3 million EUR high-quality ($3.6 million USD).

Based on the AGCM’s January twenty fifth press-release, Lyoness, working as myWorld Italia and Lyconet Italia

is promoted in a misleading and never very clear means and has pyramidal components constituting gross sales.

As famous by the AGCM Lyoness’ cashback platform is a ruse, behind which the corporate runs a pyramid scheme.

The investigation carried out by the Antitrust has made it attainable to determine that the promotion scheme adopted by the 2 corporations is barely formally aimed on the diffusion of a cashback service (which permits the return of a share of the cash spent on the affiliated retailers).

In actuality, it’s aimed toward recruiting an ever-increasing variety of appointees to whom a major financial return is envisaged.

Regardless of a number of firm identify adjustments and rebranding of Lyoness’ unique fraudulent funding scheme, investing in factors and amassing a ROI when others do the identical stays the core of Lyoness’ enterprise mannequin.

Pyramid schemes are unlawful in Italy, and so the AGCM issued Lyoness with one other high-quality.

The AGCM first investigated Lyoness again in 2018. That investigation led to Lyoness being banned and issued a €3.2 million euro high-quality.

On the time Italy was Lyoness’ major supply of recent funding.

The AGCM’s investigation revealed simply 16% of Lyoness’ income in Italy was attributable to cashback associated procuring. The remaining was direct funding into procuring items.

Lyoness responded by blocking entry to its voucher funding scheme in Italy, after which the chance quickly collapsed nationally.

Italian Lyoness affiliate losses have been pegged at 53 million euros in February 2019.

Alexa’s evaluation of site visitors to Lyoness’ “MyWorld” web site reveals an uptick in site visitors in late 2020.

This seems to be attributable to renewed promotion of Lyoness in Italy, which at present generates 40% of complete site visitors to myWorld.

I’m unsure why the AGCM took so lengthy to understand Lyoness was nonetheless being promoted in Italy. If I needed to guess although it’s in all probability on account of Lyoness continually developing with new firm names and advertising terminology.

Whether or not this second pyramid scheme discovering and high-quality means Lyoness is lastly finished in Italy stays to be seen.