Lyoness America, Inc.: Australia Federal Court Declares Lyoness « not… a Pyramid »!
Lyoness America, Inc., today reported that on October 23, 2015, the Federal Court of Australia and the Australia Competition & Consumer Commission (ACCC) declared Lyoness to be a membership shopping community operating legally in Australia.
More than a year ago, the ACCC filed suit alleging Lyoness to be a « pyramid scheme » that also « breached the ACL prohibition on ‘referral selling’, where a consumer is induced to buy goods or services by the promise of a commission or rebate contingent on a later event. »
The court not only disagreed with both charges, but has ordered the ACCC to pay the court costs incurred by Lyoness in the more than a year it spent defending itself against those charges.
Lyoness consistently and persuasively protested its innocence, referring to its more than a decade of legitimate international operations in 46 countries where the Lyoness Loyalty Shopping Community and Cashback programs have been uniformly successful.
In its statement announcing the court’s decision in favor of Lyoness, the ACCC states:
« The Federal Court has found that a loyalty program operated by Lyoness Australia Pty Ltd does not contravene the pyramid and referral selling provisions of the Australian Consumer Law (ACL), following action by the Australian Competition and Consumer Commission. »
According to the ACCC statement:
« The Court found that any entitlement to receive a benefit [from Lyoness] was occasioned—not by the introduction of the new Members—but from the pursuit of shopping activity by those new Members and the shopping activities of further new Members who, in turn, may have been introduced by such new Members. »
In other words, Lyoness Members receive Cashback on their purchases from Lyoness Loyalty Merchants, and Lyoness Marketers receive commissions on the purchases made by Lyoness Members.
Which is what Lyoness had argued from the beginning.
The ACCC also reported it had « failed to establish that persons could become Members only by making down payments. »
Consumer regulations vary from country to country; nevertheless, Lyoness America, Inc., CEO Iain Bratt says, « This is an important decision for Lyoness. We live in a world that is more and more connected by the agreement of international trade practices and the omnipresence of the Internet. Our Members have been vindicated in their loyalty to the Lyoness brand. And those self-appointed critics who were unwilling to grant Lyoness the benefit of presumed innocence…well, now that they have been proven mistaken, perhaps they will reconsider their opinions and be less hasty in their future rushes to judgment. Thousands of Lyoness Members in North and South America are better able to manage family budgets and to stretch decreasing Middle American incomes. »
Lyoness International comprises two brands: Lyoness is a free membership shopping community served by a growing number of Loyalty Merchants representing both local and international brands. Lyconet is a direct marketer of Lyoness Memberships through an organization of home-based independent Marketers. The international parent company, Lyoness International, represents 5 million Members who enjoy the Lyoness benefits at more than 50,000 Loyalty Merchants in more than 46 countries around the world.
