I heard that some are heading from YTB over to Fortune Hi Tech. Fortune has a similar compensation plan and has recently been in trouble with an Attorney General, (see previous MLM Blog post), Could this be out of the frying pan and into the fire for YTB associates?
Speaking of YTB. Is this the end?
YTB International faces a new legal challenge with the year-end filing of a class action lawsuit that alleges that YTB has “perpetrated an illegal pyramid scheme that represents one of largest fraud(s) in the history of the State of Illinois and the history of this nation.” The plaintiffs are requesting $ 100 million in actual and punitive damages and was filed U.S. District Court for the Southern District of Illinois, East St. Louis Division. The action has once again focused attention on multilevel marketing companies and industry standards.
“The defendant corporations have taken over half a billion dollars from their unsophisticated customers, selling them on the dream of cheap travel and million dollar pay-outs when the only way that Plaintiffs and their class could make a net profit was by recruiting others to join the illegal pyramid scheme,” the plaintiffs argue. “While over half of the its customers received no travel commissions at all, the directors of YTB International, Inc. each paid themselves multi-million dollar salaries while also siphoning tens of millions of dollars from their publicly traded corporation to privately owned corporations that they owned and controlled. Plaintiffs and their proposed class ask this Court to end Defendants’ massive fraud and to enter a judgment that compensates them for the hundreds of millions of dollars that Defendants swindled. Plaintiffs’ claims are typical to those of their proposed class because they arise out of Illinois common law.”
I certainly don’t have all of the details on this but I have to believe that many of these types of lawsuits stem from those who are pissed because they failed, decided to quit and now they want to blame it on someone. It’s too bad because it gives the whole industry a black eye. It’s like if I was hired for a sales job where they paid me 100% commission (no hourly or salary) and I agreed to accept that form of compensation when I took the job. Then six months later I haven’t made a sale and decide to quit, if I haven’t already been fired. Then I try to sue my company because they never paid me at least minumum wage for all of the hours I worked! Ridiculous. If you don’t understand the compensation plan and how you get paid, then don’t sign up!
Steve, less than 25% of the revenues in YTB Travel came from actual product (travel). The rest of the revenues came from sign ups. You and I would call that a Pyramid scheme.
Interesting. I didn’t know that. Thanks Ty.
Ty,
by any chance have you received a copy of the lawsuit? I have seen a lot written on this, but have not yet found the actual filing to review.
Great reporting as always.
Living An Epic Adventure,
Troy
Ty-
Long time no see! Although we decided to leave YTB, a while ago (the side products that YTB was selling clued me in to the fact that business wasn’t going well), I respectfully disagree with your assertion regarding the revenue sources.
There is a common misconception that Travel is the sole product for YTB. That isn’t true. Travel is one part, but offering business owners an actual travel portal is the other product. As someone who used the travel portal to save a TON on our honeymoon and other trips, I can attest to the fact that the travel portal was a legitimate product. It’s no different than the charge GoDaddy charges for web hosting.
Reading the lawsuit allegations really makes my blood boil. The all-knowing AG’s are basically insulting every single person who signed up with YTB. We’re TOO STUPID to know what we’re signing up for. What an elitist liberal mentality…
Then again, I was never the person promising flashy cars, etc. I always told my prospects that as with any business, it is hard work. I think that those independent contractors who purposely mislead should be held accountable.
However, as you know, the vast majority of people sit on their a** waiting for the money to come in- then run around screaming that YTB is a scam when money doesn’t start magically filling up their bank accounts. Bottom line, while a few may have been misled, the majority of people who didn’t make money, just didn’t do any work. YTB isn’t a welfare program, if you want to make money- you have to WORK.
There are plenty of consumer scams going on now-a-days, the AGs should focus on that instead of the age old “pyramid scheme” fight….especially since Social Security is the biggest pyramid scheme of all! : )
Hope all is well!
Natasha
I was excited when we joined YTB, the plan sounded great, however, in the end it was a pyramid sceme. When the IATA was not avail as promised I couldn’t book a cruise that sold. Other perks were not avail and if you didn’t sign up additional RTA’s you didn’t make the money. The top dogs all had many many people under them, were they selling travel, no just the opportunities to become a RTA and move up as a director.
so sad to see dawn speak the way she is- the iata number was the booking number that had and still has to be used on all bookings. without it you are correct you can not book anything not even a hotel.. Anything booked through your website such as a cruise has the iata attached to it automatically. I have made money on my travel site and yes I made money on my downline most of which have dropped out. I have weighed it back and forth and the benifit still outways the cost. If you work hard and let people know you have an online travel store it is easy if you have friends that travel. If you do not tell anyone you will not make money. So while I have not made enough money to retire I still make enough to find my site a benefit. Even if I only book my own travel I still have benefited from my site. YTB is the prime example of people who are dreamers and not workers finding a great opportunity and doing nothing with it then begging “big brother” to take care of them kinda like lazy wlefare people.
That’s the period when you’re increasingly likely to get
off to a flying start and achieve a full-time income in
the least possible timescale. Through teams, independent YTB business owners can help each other grow their businesses by
providing support, training, and friends to rely on. The business owner must be willing to do whatever it takes to get
the job done, even if it means sacrificing some aspects of pleasure and
comfort now for financial freedom later.
Well interesting development