Norway reaffirms Lyoness illegal pyramid scheme decision

Any hope Lyoness changing its name to myWorld would reverse an earlier ban have been dashed, after the Norwegian Gaming Board reaffirmed Lyoness is an illegal pyramid scheme.

Following a second internal investigation, in January the Gaming Board ruled Lyoness was an illegal pyramid scheme.

As at the time of the decision, Lyoness was ordered to immediately cease operating in Norway by the end of March.

Lyoness responded to the ruling by filing paperwork with the Gaming Board regarding their change of company name to myWorld.

The Gaming Board in turn published an update, acknowledging receipt of the paperwork and their intent to go over it.

As silly as a company changing its name to avoid regulatory banning might sound, the announcement prompted Lyoness affiliates to claim the ban didn’t exist.

In an update published on June 4th, the Gaming Board announced despite Lyoness changing its name, the company is still an illegal pyramid scheme.

Examination of further material provided by Lyoness regarding its name-change appears to have concluded recently, after which the Gaming Board reaffirmed its decision.

On March 31, 2018, the Lottery Authority has ruled that Lyoness must cease all operations, participation in and extension of work in Norway as the work is an illegal pyramid-trading system.

Three key conclusions drawn leading to the decision include:

  • Lyoness’ revenue in Norway is primarily derived from new affiliate investment, not shopping as is commonly claimed
  • Lyoness affiliates invest in coupons, the company does not sell any goods or services that demonstrate value beyond participation in the investment scheme
  • Lyoness does not accurately document revenue generated by the sale of goods and services

For their part Lyoness has failed to cease operating in Norway or inform their affiliates of the ban.

The decision is directed against myWorld Norway AS (former Lyoness Norway AS) and Lyoness Europe AG, but will also affect around 152 500 Norwegian participants and 1000 Norwegian loyalty companies included in the revenue system.

Lyoness has three weeks to respond to the Gaming Board’s decision.

Given they’ve already participated in the investigation and had a chance to respond to the initial decision, it’s unlikely anything short of a complete overhaul of the fraudulent business model will reverse the Gaming Board’s decision.

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