Many years back, unscrupulous Internet Marketers discovered a way to build their business by discrediting their competitors. It’s quite a simple strategy:
- Register at self-appointed “watch dog” websites, which are often forums
- Start posting negative opinions, whether believed as true or not, as if they were facts
A person is presented with the Lyoness opportunity and they wisely decide to conduct their own due diligence, to see if the opportunity is real. They open up their web browser and user their favorite search engine, like Google, and search for “Lyoness scam” and back come, as of this writing, 26,700 results. To someone not versed in how the “The Internet Marketing Scam Scam” works, this seems like a large number. Actually, even if the number were 100,000 or 1,000,000, it would be relatively low. Here are some comparative searches:
- Microsoft scam = 29,700,000 results
- Apple scam = 31,600,000 results
- Amazon.com scam = 38,100,000 results
- Facebook scam = 88,200,000 results
- Google scam = 90,200,000 results
Now, obviously all of the search results above are not describing the respective companies as scams. My point is that the presence of a large number of results for a given search, like “Lyoness scam,” means nothing. One has to meticulously research the results and look at the evidence to separate fact from opinion.
Fact vs. Opinion
Fact: A fact is something that is true about a subject and can be tested or proven.
Opinion: An opinion is what someone thinks about that subject.
Evidence: The available body of facts or information indicating whether an opinion is true or valid.
A Sampling of Forum Postings
Following are specific examples of forums that contain discussions—many of them quite long—about the Lyoness opportunity. If you choose to peruse this content, I encourage you to note:
- How opinions are stated as facts without citing evidence
- Once something is published on the web—or printed on paper—it’s assumed to be authoritative
- Other sources of opinion masquerading as fact are then quoted as if they were evidence
- Nearly all of the people posting do so anonymously
- The net effect is that doubt is introduced, creating fear
A sample list:
There are many more, but the above are enough to introduce you to this Internet Marketing technique.
I have first-hand knowledge from a consulting client whose business was defamed by a forum such as those listed above (but not included in the list above) that the forum owners tried to extort money from him in order to remove the false complaints. I have no evidence that any of the above-listed forums engage in similar practices.
Challenging Some of the Opinions
I’ll now challenge some of the misleading information in the above-listed forum posts:
Opinion: The Lyoness compensation plan is complicated.
Fact: Lyoness business members can earn income ten ways. The plan is comprehensive, not complicated. It was explained clearly to me in a thorough 1-1/2 hour presentation. I had a few follow up questions, which were answered to my satisfaction.
Opinion: Lyoness is in trouble.
Fact: There is absolutely no evidence that Lyoness is experiencing legal, financial, or other difficulties beyond those encountered in the day-to-day operations of any other company of Lyoness’ size.
Opinion: Business members “invest” in Lyoness.
Fact: It is free to become a Lyoness member. Business members can make a gift card down payment on future shopping. This is not a membership fee of any kind. The money is a commitment to shop and credited to the member when in the future they shop. I found the Lyoness presentation of the video to be transparent and clear.
Opinion: Lyoness is a new or “fly by night” company.
Fact: Lyoness has been in business since 2003 in Europe, are currently operating in 40 countries, have 2-1/2 million members (with 47,000 members per week worldwide joining), offer the largest shopping community in the world, are a certified ISO 9001 business operation, are audited by the prestigious audited by TUV Rheinland firm, are engaged in two comprehensive philanthropic initiatives, and now employ 800+ staff worldwide. Most convincing in my own research are the thousands of large corporations who have each conducted their own due diligence into Lyoness, names like Apple Computer, Wal-Mart, Macy’s, Panasonic, Foot Locker, Budget-A-Car, Barnes & Noble, Old Navy, etc. In a large corporation, one’s professional reputation and career success are based on the decisions you make. In each of the thousands of companies who are working with Lyoness, their management and legal teams have signed off on the decision completing their due diligence.
I will address additional misrepresentations below.
Controversy Creates Traffic
You may remember your early school days when someone yelled, “Fight!” Fights draw crowds. Sites the foster arguments, whether over politics, religion, money, or any of the other “hot buttons” in society, create traffic. Many websites employ the advertising business model, so the more traffic they receive, the more money they make. There’s nothing inherently unethical about this strategy, but it can be used in very negative ways. An example would be an untrue “attack ad” in the political arena. Negative ads work, since controversy riles people up, gets them talking, and can mobilize people to vote.
You’ll note that many of the forum “threads” mentioned above are quite long. The more people argue, the more content they generate for the website owners. Page after page is created, generating more and more traffic. And even if a website does not display advertising, when it comes time to sell that site, the more pages and traffic there are, the higher price they’ll be able to negotiate.
Legitimate Help with Scams
Not all forums, blogs, and websites operate with the strategy to mislead. Some operate with the purpose of providing helpful information. However, if you research such sites, you will still discover nearly all of the content is opinion. For example, a self-appointed “watchdog”, Rod Cook, published on February 14th, 2012 a negative article about Lyoness that has subsequently been removed and replaced with: “I have some really good WatchDog “Deputies” Who zeroed in on very ‘flashy’ newly launching (in the U.S.) as an MLM. They report that they are now in compliance with all U.S. laws. There have been no authorities charging illegal activity in checking Europe and Austria where they have been operating.”
The problem is that many other websites and blogs republished Mr. Cook’s report as if it were factual, fostering the illusion they were citing evidence, and many have not updated their content with the retraction.
If you would like to conduct legitimate due diligence on Lyoness or any other company, I recommend you contact the appropriate government offices. For example, if you live in the United States, you can contact the Attorney General of your state and inquiry about consumer complaints, and the Federal Trade Commission at http://ftc.gov. If you do not reside in the U.S., hopefully your country provides similar consumer protections.
Complaint and Review Sites
Besides discussion forums, there are many other types of websites on the Internet where one can publish information. For the website owners, this strategy is called “user-generated content,” which means that the information is created by others. This is a legitimate method of operating a website and is how much Internet content is created, including Facebook and Google+ updates, reviews at Amazon.com, and literally millions of other examples.
Here’s an example of a site where users can generate content about things they consider to be “scams”:
I have reviewed the Lyoness business model in-depth and count no less than five factual inaccuracies in this post. But note that because the information is published on a website, there’s an unconscious tendency for many to consider the information as valid.
Here’s a person claiming to be an attorney who made AU$36 supposedly conducting due diligence for a person inquiring about Lyoness:
The verdict of LegalPro54 “after a very thorough review” contains many inaccuracies, some of which I will now challenge below:
LegalPro54 Opinion: “…this company is likely operating a multilevel/pyramid marketing scam…”
Fact: Lyoness was founded in Austria and is maintains their headquarters there. Pyramid schemes are illegal in Austria, just as they are in the U.S. and many other countries. Lyoness was founded in 2003 and no country has ever filed a complaint that it is a pyramid or Ponzi scheme. When Lyoness America was founded in the U.S. on July 2nd, 2009, they did not start marketing memberships. Instead, they opened an office in New York in the Empire State Building and spent the next 1-1/2 years researching the business law in all U.S. states and provinces in Canada to ensure their program was 100% in compliance with all country and state/province laws.
LegalPro54 Opinion: “…their domain registry indicates that the website was created in the country of Malta…”
Fact: Websites are created in countries across the globe and this has nothing to do with operating a legitimate business. Lyoness chose to registrar their U.S. operations in Delaware, just like many of the best businesses in the country.
LegalPro54 Opinion: “Anything that needs to be sold at a “seminar” should be immediately regarded as suspect.”
Fact: Lyoness is a recommendation business and is shared in many ways, including the web site, printed literature, personal meetings, informal group meetings, and seminars. There is nothing inherently illegitimate about people meeting and experiencing a business presentation.
LegalPro54 Opinion: “There appear to be a very large number of “shill” reviews for this company (reviews posted by company representative and not actual, satisfied customers). This is another huge concern.”
Fact: Providing testimonials is a common form of marketing. LegalPro54 possesses no evidence that any testimonials are not from actual satisfied members of the program.
LegalPro54 Opinion: “Here is a much more honest assessment of Lyoness: Lyoness cash back card system”
Fact: This is an excellent example of citing opinion as fact, as I mentioned earlier in this post.
The result? The person who was interested in Lyoness now doubts the viability of the company, persuaded the company’s activities are fraudulent. Perhaps investing some work, over time, Lyoness may have been a good opportunity for this person. Now they are left with only fear of getting scammed.
Accusing a company of being a scam without sufficient evidence is itself a scam. On the Internet, controversy creates attention and free user-generated content (e.g. blog and forum posts), which generates visitor traffic from search engines that can be monetized.
What’s Your Viewpoint?
I welcome your comments, pro or con, below.