Stay Safe

To all my friends and associates on the Gulf Coast, please be safe and sane. My thoughts are with you--please check in when it is safe!

Can SEC Investigation Be Far Behind?

The St. Louis Post Dispatch has just released a story on all the insider deals by YTB. Some have been known for some time, but others were a surprise.

While technically legal, in today's environment, they do raise suspicion and red flags according to experts. And then you toss in the unwillingness to comment for the story and you have to go "hmmmm".

Some of the transactions include:

• The Plane
• The Statue
• The K-Mart
• The Development
• The Cars
• The Sub-Prime Bank Loans

It almost seems if YTB is just flaunting their blatant disregard for ethical business operations.

Congratulations To The Davidoffs

Well, well, well. It appears that the Davidoffs may have had a little extra incentive for cheering up YTB in the trade press. Apparently they were one of the Freedom Winners at the conference. So Phil and Doris....are yor now IMRs and RTAs?  So let me get this straight, you appear to be members of YTB and are also hired by them, yet you have no qualms about singing the praises of YTB and branding yourself as a former ASTA President. I am sorry, but I have to say that what little respect I had for you is very quickly evaporating. ASTA distanced themselves from your comments but did not name you--maybe they should have.

But reading this list is also interesting about the names that are or are not on the list. Holton Buggs is there, Phil Piccolo is not, Baughknight is not, PJ Jensen is, Seligman is not, and I did not see one single Osei, Turner or Walker in the bunch. But a lot of

Interesting reading for sure!

Bermuda Investigating YTB

Bermuda appears to be investigating but their laws have no teeth.  I wonder if this may have been a reason for the expansion into Bermuda in the first place?

From the Bermuda Sun, they know YTB is a pyramid, but the antiquated laws make it difficult to prosecute.

One legal source, who has links to the DPP said: "A file has been on the fraud unit's desk twice. We know they've looked at it, and continue to look at it, but it's a question of getting a prosecution. There's no doubt that this is a pyramid scheme, but the chances of getting a prosecution here are close to nil. In California, and elsewhere in the States, they tailor legislation for exactly this kind of situation. In Bermuda, our laws are more broad-ranging, so not much can be done."

And the Authorities appear to be cooperating with the Cal;ifornia Attorney General as well:

In a separate development, the Office of the Attorney General in California warned Bermudians not to get involved in YTB. A spokesman said: "This office does not undertake lawsuits lightly. Every action follows a thorough and complete investigation of the evidence. We hope that Bermudians will take note of what is happening here and will protect themselves from this kind of aggressive marketing."

I Am Speechless

Several months ago, I posted a photo on this blog that raised the ire of the YTB crowd. It was called pornographic, vulgar, exploitative, and just downright offensive. Apparently "humor" is not one of the classes offered by YTB at their universities. Apparently what is good for the goose is not good for the gander.

On today's post of Just Picture It Now, The YTB Savior In Chief includes a link to a photo of the blog author (presumably) either urinating or masturbating on a public highway in presumably Cozumel Mexico. Is this the appropriate image for an ambassador of travel to portray to a foreign nation? Or just another "we don't care" attitude from YTB?

His paragraph encourages YTB headquarters to send this photograph to "the ATSA" because he now feels that it is no longer this blog's influence that fired up the California Attorney General, but "the ASTA""

Oh, before I go. I did happen to send this “gem” up to the home office with an idea of getting everyone together on the Seminar @ Sea with the Davidoff’s and sending the ASTA a postcard from the Seminar entitled “Greetings from Cozumel”.

As I was typing this entry, it seems that the image was mysteriously pulled. However, I was able to get a copy:

Obviously this was not the gist of his blog post--it was intended to bash ASTA because they do not back up the Davidoff's position on YTB. But like it or not, ASTA is a player in the industry and since YTB says they are so concerned with "legitimizing" themselves in the industry, one would think bashing ASTA might not be a good thing to do. That list of "we don't need no stinkin'...." gets longer and longer each day.

Since the blog in question does not allow for any comments, if you are offended by the photo (if you saw it before it was pulled) or the content, you can voice your opinion directly to the CEO of YTB at info@ytb.com.

Flying High With YTB

ASTA Takes A Stance

ASTA has taken a very firm stance on the MLM issue and has essentially renounced the Davidofff endorsement of YTB!

ASTA Reiterates Opposition to Abuse of Multi-Level Marketing and Card Mills

Alexandria, Va., Aug. 28, 2008- Following on the heels of legal actions taken by various states, including California, against a multi-level travel marketing firm (MLMs), ASTA is reiterating its stance regarding MLMs and card mills.

Said ASTA President and CEO Cheryl Hudak, CTC: "While it may be possible for an MLM to operate within the law, when the rewards for participating individuals are based primarily on recruiting additional participants and not on selling the underlying product, it is appropriate for governments at both the federal and state level to investigate and act where deception and abuse are occurring.

"ASTA is aware of a recent trade article in which a former ASTA official (16 years ago) was quoted in support of a multi-level travel marketing firm that has been sued by the State of California, among others. He is entitled to his opinion, but let me be clear that while we do not question his right to a contrary view, ASTA absolutely does not share the quoted opinion about the probable future of the travel industry.

"Card mills are a different type of operation, in which the idea is to sell what purport to be travel agent credentials to consumers who are not planning to seriously engage in the sale of travel as a business but who are trying to secure professional courtesy discounts that are not intended for them. ASTA has actively opposed card mills for decades. We filed suit in California and the case was settled by our collecting and destroying the cards that had been issued. We also complained to the Federal Trade Commission, but our request for a trade regulation rule was denied in large part due to lack of support from the supplier community," Hudak added.

In 2005, as a way to educate the public about the harm that multi-level travel marking firms and card mills pose to the travel industry and consumers, ASTA released to Better Business Bureaus (BBBs) and consumer protection agencies across the country a white paper entitled What Consumers and Consumer Protection Agencies Should Know About Travel Industry Card Mills. At the same time, this white paper ASTA was made available to consumers on TravelSense.org. To read, go to www.travelsense.org/consumer/index.cfm.

The paper examines how holders of card mill IDs differ from legitimate travel agents and what credentials legitimate travel agents may have. It details the ways in which travel industry card mills harm consumers and the travel industry.

More Trouble In Wood River--YTB Cans Nearly 10% Of Staff

YTB has laid off nearly 10% of their headquarters employees. This move had been rumored since just before the convention and of course denied by all the RTAs and Reps that are "in the know". Some even went so far as to allude that YTB was more sound than Royal Caribbean who laid off 400 employees a few months ago. While 400 is a lot of people, it is certainly not 10% of their workforce!

What is ironic is that since the convention, YTB has created the pitch to "Recession Proof Your Income" They are selling the DVDs to their Reps and the message is clear--join YTB and don't worry about income ever again. Does YTB listen to their own advice? Or do they just creat advice that will create a revenue stream in the form of another DVD, Magazine or flyer to purchase? Did YTB provide this DVD to the 25 employees they laid off? Is there any truth to the rumors that they required 12 hours workdays for 8 hour pay at the convention?

It certainly does not seem that YTB is quite the "darling" of Wall Street or Main Street.

I realize business is business and tough decisions need to be made all the time, but the current economic condition did not sneak up on us (and if it did sneak up on YTB, they deserve everything they have coming to them), yet in the past 8 months they have purchased a corporate jet (from an insider), purchased a multi million dollar foam stage prop (from an insider), chartered two ships that failed to sell out, and made a lat ditch effort to stave off the California lawsuit.

My best wishes go to the employees who were laid off, I hope it is a sort term issue and I am confident that there are much better opportunities that lay ahead.

The Lawyers Lay In Wait

Last week in Travel Weekly, there was a blurb about attorneys laying in wait for the next suit against YTB. Some of the insight is amusing. See, it was not only this blog that felt it was just a matter of time.  Before long, you will have your pick of suits of which to enjoin:

There's no shortage of websites devoted to YTB matters. One law firm is even launching www.ytblawsuit.com as an information source and tool for finding more plaintiffs for a class action filed in mid-August. But someone has apparently expected this kind of litigation for awhile. Another site, ytbclassaction.com, is unused, but the domain name has been held for more than a year, TC hears. The owner is the Roth Law Group in Chicago. But the firm is not listed as a plaintiffs' attorney in either of the existing class actions filed against YTB.

Where's The Pinnacle Award

Back when the awards were announced, the word was that it was being "saved" for the convention.  So did YTB earn it again? Or were they passed over?

The word on the street was that there was some pressure from "real" agents that had received it and how it felt a little less prestigious.

A Fitting Image For YTB

By now, we all know of the "image changes" at the recent Olympiad. The not so cute singer... the not old enough athlete...the mental terrorism...and the fake fireworks. All these were done to enhance the world image of China as they had an opportunity to really shine. But the farce came apart and the world was able to see China for what it really did represent (no politics here) as opposed to the image China felt the world should see.

That sort of seems like one of the MLM companies that has taken a hit on this blog for the better part of a year. As a matter of fact, they even had a connection to the Olympics. Remember, they were going to be the world's largest supplier of tourists to the Olympiad because of their affiliation with Shanghai Spring Tours. Well, that did not happen and apparently YTB was not above the IOC and they were not able to "call a play" to allow the $3M in tickets reserved for Chinese Nationals to be used for their packages to US Nationals. So how many were there? My guess is zero. I bet there were severl directors who paid for a package and then were forced to buy locally and see if they could attend any of the events.

Last week's edition of the YTB Biz Report (as all weeks do) featred the above graphic as their "inspirational insight" along with this quote....

Some people make headlines while others make history. ~Philip Elmer-DeWitt

Well, maybe it is appropriate for some companies or countries, but not so sure it fits the bill here. YTB is indeed making headlines, they may be also making history in a sense; but rest assured most of what they are claiming is indeed false and deceptive--just like the fireworks.

Inside An RTA's Mind

This seems pretty typical of the response of most in YTB. Are Steve Mencik and I the only ones who see the flaws in this type of thinking?  And this did not even come from one of my blog posts!

On August 18th, 2008 at 6:24 pm Chris G said

I would like to apologize to all the traditional travel agents out there. I have been a MLM junkie and have been a threat to your business. I have been in YTB since July 2006. I have currently have a massive downline of 4 RTAs (I used to have 6, but 2 quit) and 11 Reps (Reps can join for free in case anyone didn?t know). None of these RTA?s or Reps have been motivated to do anything. I have shown the business to maybe 25 people. I know, I?m such a recruiting machine. I have also booked a whopping total of $172.60 in travel commissions. I know, I know, I should be ashamed of my greed. Most of these bookings have been from family and friends, but also a handful of strangers who found my travel site on the internet. Most of the bookings have been with flights, hotels, rental car and an occasional extra like honeymoon registry or tour. I work a full time j.o.b, go to school and enjoy working my business part time. Even if YTB didn?t have the marketing company, I would still purchase the travel site, even if I knew I didn?t have a snowballs chance of making a lot of money. I guess if I give up my YTB site and if myself, my family and friends book through a traditional travel agent, they will share their commissions, bonuses, tax deductions, benefits and more, cool.

On August 18th, 2008 at 9:38 pm

Chris,
The small amount of commission that goes to you or any other YTB or other MLM agent is not the point. You are ?working? a business part-time. You have spent approximately $450 to sign up, and another approximately $1200 in monthly fees to collect $172.60 in commission. Quit now, promise me you won?t go into another MLM, send me a check for $500 for this advice, and you?ll only lose $500 over the next two years, instead of the almost $1500 you lost over the last 2 years. What a bargain! I?m saving you $1000 and you don?t have to do anything at all!

You said, ?Even if YTB didn?t have the marketing company, I would still purchase the travel site, even if I knew I didn?t have a snowballs chance of making a lot of money.? Why would you purposely get into a business in which you knew you would lose money? Are you one of those people that P.T. Barnum talked about?

Apparently you don?t understand that traditional travel agents are not concerned that you are ?stealing? our business. We are more concerned that by pretending to be travel agents, you are going to damage our reputation as people that know the products we sell, and have the experience to give people expert advice on which product is best for them. People that are going to book online aren?t going to come to us anyway. They will go to Expedia, Travelocity or a host of other places, including the YTB sites. Just remember, if you book your trip online, you?re on your own.

If you are really serious about having a part-time travel business, there are host agencies that will give you an 80/20 split on commissions instead of the 60/40 split that YTB gives you. Some of them charge no monthly or annual fees. Some of them give you a website just like YTB?s for free. They also provide true travel agent training, not the CRTA recruiting training.

To get what few travel benefits there are, you will have to earn them. You?ll actually have to sell enough to earn $5000 in commissions in a year so you can get your IATAN card, something you?ll never get with YTB, since IATA dropped them.

So, no apology needed. Go ahead and keep giving Coach and company the hard-earned money you earn at your j.o.b.
When you are ready to be a true travel agent, give me a call.

Thanks Von Nickleberry

I got a call this morning from Von Nickelberry (YTB Director and Instructor at the Convention) and I want to publicly thank him for his time and opinions. Surprisingly, we agreed on a number of things; but by the end of the call, we definitely are not on the same side.

Von, is very adamant in his beliefs and his loyalty to YTB. I admire that and I also think he admires my equivalent tenacity on my side of the fence.

I enjoyed the call, and I will be calling him back at some point to continue it. It was refreshing to have a conversation as opposed to a lecture, recruitment pitch, or worse.

Travel Training 101

I recently ran into an interesting question brought up by a fellow poster, and YTB Travel Professional, that caught my attention. The reason it did so was because one of the main things the YTB posters tell us constantly is that their RTA's are TRAVEL TRAINED and that YTB itself and suppliers train them exclusively. You even have Marc Mancini doing training’s for you.

"Hi, I have a teammate who is looking for a part time job in the travel industry to get more experience. Does anyone know any places that will hire in an office (B&M) an inexperienced person who has purchased an online agency? "

If you are so well trained, why would you want a job working in a B&M (the shame..a JOB) to gain more knowledge and experience? Shouldn't you already have had all this from what we are told? I’ve seen a response saying that training is not experience..your right it’s not, but that would also mean that probably 90% of the RTA’s have none of that as well. Also, why would you think that a B&M agency, who’s not affiliated with YTB, would hire you part time/full time/anytime when you have a separate booking engine that would not give them the business?

Now in all fairness, the training you all claim to get from suppliers is not really training at all. Showing you a product, is simply that. Training for a real agent would be learning a GDS, geography classes, deciphering airline rules/regulations, exchanges or tour operator procedures. I'm sure many would agree to this fact. I've seen posts where some do not even know that Canada is not part of the US, do not know that Visa’s were required to travel to China, and as yet nobody has answered the question to the difference between MCO and MCO. Since the convention the only "classes" I've seen referred to were about recruiting (Build Your Biz the Christian Way & Building Momentum through Travel Parties). When are the “Geography 101” or Customer Service 102” classes?

I googled YTB Travel Training and majority of what I got was..you guessed it...recruitment training. Shouldn’t travel training be MANDATORY and not OPTIONAL for you to become an RTA? Especially for those who do not simply want to be a website, but want to jump on in and actually assist customers. With all the emphasis on the lawsuit saying recruiting is what all your about, you'd think someone would wise up and actually start pushing the Travel Training Part.

Get into heaven for only $495 and $50.00 per month!

When I was a little kid, I used to get God and Santa Claus mixed up. They both had a beard. They both got talked about a lot around Christmas. They both gave some kind of gifts. They both lived far away. And you had to be really good or you got into a lot of trouble with both of them. They both knew exactly what you were doing all the time.

Now that I am a grown up, I don’t get the two confused any more. So I am perplexed as to why so many people seem to have YTB mixed up with God.

Ever since the crap hit the fan in California, we’ve seen a staggering number of posts, all claiming that even through the State of California, the State of Illinois, the Better Business Bureau, and a raft of other organizations all seem to be having some trouble with the way YTB runs its business, God himself is still firmly behind the wheel.

Let me show you a couple of examples of things we’ve seen posted this week by YTB members.

“It is a rock solid company with the favor of God upon it”

And this...

“There are so many people out there who want and NEED financial
FREEDOM... how can we not stay focused on the task God has given us?”

And my favorite...

“This company is no different than Jesus. He was ridiculed, scorned,
talked about and everything else. So is YTB. But being built on the
foundation of God's principles I truly believe that God has His hands on
this company”

There are many more, but I think you get the point.If, in fact, YTB is the honorable company they would all like us to believe, then why the desperate attempt to make us believe that the big man upstairs is behind the whole thing? Why can’t this company and their members survive on their own merit, without using God as their celebrity endorsement?

I just learned that YTB actually had a class at their most recent convention about how to use God to recruit, and how much YTB is just like God! I found this on a YTBer's blog.

"My First class was with Level 2 Director Von Nickleberry. Entilted "The Believer and YTB; Build Your Biz the Christian Way". Von shared his testimony interwoven in showing the siilarities of network marketing and the creation of the early church. He shared how it is possible foe Beleivers to be successful in Network Marketing. "

No more having to worry about how to get into heaven. You can now buy your way in just by joining YTB. All major credit card accepted.

What A Difference 4 Years Makes (NOT!)

I just found this old article from Travel Trade. The more things change the more they stay the same. Same ploys, same tactics. I see that Carnival was still a staunch supporter way back then! Maybe things will begin to change.

April, 2004
Travel Trade

YTB Grows With Confab, Personal Web Site Ads

By John Stone

Travel agent readers of Travel Trade in the Southeast in recent days have reported a visible increase of recruitment activity among representatives of YTB Travel, especially in Florida, Georgia and South Carolina.

The current campaign was climaxed by the company’s first YTB agent network trade show in Orlando last weekend.

Three Subsidiaries

YTB, whose parent company is YTB International, based in Englewood Cliffs, NJ, has three subsidiary business groups including YourTravelBiz.com, REZconnect Technologies Inc., and YTB Travel Network. Some of the company’s travel agency brands include Your Travel Biz, YTBnet.com, Travel Network, Global Travel Network and YourTravelBiz.com, among others.

Key promotional messages communicated by YTB to prospective members include the opportunity to “become your own travel agent” and to “travel the way travel professionals do.” The organization offers its primary earnings opportunities based on the ability of YTB members to attract other people to become members.

People who join as new YTB members are called “RTAs,” for “referral travel agents,” and among the possible layered clusters of members surrounding a YTB recruitment representative are such designated groups as “the first team,” “the power team” and “the dream team.”

Cards available for members are displayed on some of YTB’s recruitment pages. They include YTB’s own agent card with the member’s photo on it; a CLIA member card (the sample card has a picture of CLIA training director Tom Cogan), and an IATAN card, which YTB correctly notes requires qualifying sales levels to obtain.

The company operates multiple Web sites, most designed to recruit industry newcomers to become YTB travel agents and then recruit others to follow them into the network. Local representatives of YTB operate their own Web sites, under their individual business names, such as “Travel Closeouts,” “K and J Vacations” or “Partnor Travel.”

Last month YTB’s parent company, which officially changed its umbrella name from REZconnect to YTB International after the two companies merged on Dec. 8, 2004, reported net losses of $248,530 for 2004, based on net revenues of $3.8 million (Travel Trade, April 25).

Among the notable recent YTB recruitment activities were the following:

Over the weekend of April 29-30, the company hosted its “First Annual YTB Travel Network Funshine Trade Show and Conference” at the Wyndham Palace Resort and Spa in Lake Buena Vista, FL, in greater Orlando.

The event, according to a Travel Trade agent reader in attendance, attracted about 500 attendees, most of whom attended day sessions during either the Friday or Saturday all-day schedule. Most, however, were not visible in the hotel as overnight guests.

Several of the YTB Orlando attendees displayed magnetic signs on the doors of their vehicles in the Wyndham Palace parking lot publicly announcing the name of their YTB travel agency.

Cocktail Party

A weekly networking cocktail party is hosted at Orlando area hotels by YTB representative Scott Bender. Bender’s individual company is named Travel Closeouts and has its own Web site.

An invitation ad for the networking event on Bender’s site says, “Great business opportunity — Travel like a travel agent. Why pay retail for travel when you can pay wholesale? Find out more!”

Professional singles or couples meet at the parties to make new business or social contacts and, in the process, hear about how to become their own YTB travel agent.

Bender was previously an official in an airline ticket consolidator company, based in Orlando, called Airline Reservations Network.

According to a spokesman for the Airlines Reporting Corp., Airline Reservations Network and its affiliated company, Royale Vacations & Cruises, were subsidiaries of Royale Marketing Inc. The parent company held an ARC number (number 10510113) that was voluntarily deleted from the ARC system in March 2001.

Jim Sloan, a YTB rep in Flowery Branch, GA, in mid-April invited online visitors to a free seminar in the Gainesville, GA, Civic Center at which attendees heard about how to become a YTB agent from national YTB Travel & Cruises president Scott Tomer.

YTB meetings are sometimes promoted on the “meetup.com” Web site visited by small business entrepreneurs. Individuals unable to attend YTB gatherings have other ways to connect with a YTB recruiter.

ICQ Interest Groups, for example, is a Web site for personal classified ads in which people search for other people they would like to meet. Three current listings show a 37-year-old male from Texas, a 31-year-old male from Maryland and a 34 year-old female from Florida, and all are YTB agents with a similar message on their personal page.

The young lady from Florida describes herself as interested in “architecture, photography, music, Web design, video data...vacations, travel advice, romance, relationships, dreams and other interests.” Later she says, “I am an RTA (referring travel agent) for YTB Travel & Cruises. Want to have fun, earn extra money, save on travel and write it off on your taxes?”

The lady provides her Web site address for people to respond.

According to YTB recruitment information on the Internet, upcoming membership seminars, involving recruiters and membership candidates but not suppliers, are scheduled for May 7 in Memphis, TN and for June 4 in Richmond, VA.

_____

Industry Reaction to YTB:

Caution and Non-Awareness

Travel Trade last week sought reaction from national officials of CLIA and Florida officials of ASTA to the step-up in recruitment activity at YTB Travel.

“It is quite complex,” said CLIA executive vice president Bob Sharak about YTB. “If an agency has a host agent with outside agents model, and they are maintaining the model with part-time, psuedo or quasi-agents, ethically I don’t think I like the business.

“I don’t like the idea of marketing the CLIA cards for the sake of the discounts,” he added. “But it is hard to police. There are a handful of these guys I watch closely. I go to cruise lines to ask, ‘What are your travel agent rate bookings for this group?’ A couple of these are not around now. But I have to be careful. If it’s not illegal, what do you do? I can’t terminate someone without cause. It is quite frustrating.”

Jan Hammond, ASTA’s Florida area director and an agent at Sixth Star Travel in Ft. Lauderdale, said she had not yet heard of YTB, but plans to look into them. She was asked whether ASTA is making efforts as aggressively as YTB in Florida to attract new agents to the business.

“We’ve held the ASTA World Congress for 76 years and it’s been open to non-members,” said Hammond. “From April 7-9 we hosted the ASTA Cruisefest in Miami, and not even half of the attendees were members of ASTA or NACTA. Through the trade show and other sources, we estimated between 1,200 and 1,500 agents attended. So we are doing things all the time to attract new members.”

Gerry Gregorian, the ASTA chapter president based in Port St. Lucie, FL, said she plans to check with the Florida Department of Consumer Affairs to see if there are any complaints about YTB.

Travel Trade spoke to J.R. Kelly, the Florida consumer affairs department director. “We have not yet received any complaints about YTB Travel,” he said. “But we will check to see if they are properly registered.”

A Florida Seller of Travel number is listed on some of YTB Travel’s voluminous Web site pages.

_____


What’s a GDS???

According to the Travel Trade agent reader attending last week’s YTB trade show, there was an apparent lack of industry experience among several of the agents he spoke to at the event.

“I asked some agents whether they specialized in escorted travel bookings or FITs and was asked back, ‘What’s an FIT?,’” said the agent. “I asked others whether they work on a Web-based booking system or are connected to a GDS, and they asked, ‘What’s a GDS?’”

“Some also weren’t sure about what their commission and override programs are,” said the Travel Trade reader.

One attraction was key to the event. Free trip prizes were provided by a list of major exhibitor suppliers. The agent said many trips were given away, and many suppliers participated in the prize pool.

A list of suppliers for the Orlando show, listed on a YTB Funshine Trade Show invitation found at www.grouptravelmasters.citymax.com, included, in alphabetical order: Apple Vacations, Carnival Cruise Lines, Central Holidays, Funjet Vacations, Gray Line of Alaska, Hertz Corp., Holland America Line, Norwegian Cruise Line, Royal Caribbean International, Sandals & Beaches Resorts, Silversea Cruises, Trade Wind Tours and World Choice Travel, a division of Travelocity.

Correcting The Wrongs

Recently, Doug Baughknight had a very thought provoking blog entry where he discussed why an industry (us) is coming down on their own (Mancini and Davidoff) fir trying to wright what we perceive as being wrong (YTB).

Maybe Doug is onto something here. As anyone who has read this blog for a while knows, I do feel that there likely is some neutral territory for MLM and TTA.  I guess the issue is just finding it.

I am one of the critics of both Mancini and the Davidoffs. On the surface it looks like they sold out. Perhaps they did--we will never know. But if indeed they are seeing a future for YTB, maybe it is time for them to inform the rest of the world, and not via a sound bite for an article.

The issue I see is that we have been down this road many times. YTB tends to be reactionary. They skirted the IATAN regulations and it bit them in the ass. They shrugged the IOC rules for Olympic tickets and it bit them in the ass. They laughed at the CA Attorney General and it bit them in the ass. It seems that YTB is deeply seated in the MLM model and not travel. Why should the TTAs assume this is just not another way to buy legitimacy? They bought a cover to the Saturday Evening Post, why not hire the Davidoffs?

Maybe if YTB just for once decided to do something to enhance their "travel" biz, it might go a long way. Maybe have someone other than Directors and Circle of Champion members teach the Certified Referring Travel Agent traingin curriculum. Maybe encourage people to get the training and not the credential. Maybe approach the trade press and admit that they have a PR and perception problem and want to work to improve it.

All YTB has done in the last several years has come off looking like some dimented Dr. Evil in an Austin Powers remake. They want to sell "billions" and be the "biggest in the world". Their motto has been "we are YTB we make the rules, we don't follow them." Their senior management has NO travel industry background. Their Board has NO travel industry background. And very few in the call center have a travel industry background. And very few in the field have a travel industry background. If I had to guess, this supposed #26 travel company, might have 500 out of 438,000 people that have a background in travel. I would also bet that 300,000+ have prior MLM experience and are prepared to move on when the moment is right.  So why are they a travel company again?

Uhm...Excuse Me Coach? I Have A Few Questions

NOTE: This post was intended to run on Tuesday, August 5, 2008. But now that the Convention is over, it is still appropriate and I wonder if any Reps or RTAs might have had the gumption to ask some hard questions.

To those that are headed to the Convention later this week and are seriously interested in selling travel, I offer these 14 questions for Coach.

1. Are there any plans to have the Certified Referring Travel Agent Training (CRTA) classes taught by anyone with some certifiable travel experience?
2. What is happening to my clients who are traveling August 6-10 since YTB has shut down the home office to allow all employees to come to St. Louis?
3. Do you feel that $8 million was really necessary for a 3 day centerpiece?
4. Why is the donation of Lady Liberty now in the hands of Beryl-Martin? I thought this was great publicity for YTB.
5. How many RTA websites are there right now in YTB? Kim was unable to figure it out with Nadine Godwin, I figured you might know.
6. Will Dr. Bob Seligman be addressing the convention?
   
7. Is it true that you, Kim, and Scott are the owners of Beryl-Martin Printing?
8. Of the reported 22,000 in attendance, how many Reps and RTAs (not spouses, guests, families and friends) are there?
9. When will we be able to concentrate on selling travel and being recognized as a legitimate company? It is tiring having to defend YTB all the time and Kim said he was working on "legitimizing" YTB last year. How is that coming along?
10. What are your plans for credentials now that IATAN has refused to grant us accreditation and it seems like CLIA is upping the requirments significantly?
11. Are there any plans to offer a more competitive commission split to be comparable to the majority of the host travel agencies in operation?
12. When will our finances be up to snuff to be admitted to one of the Big Board exchanges?
13. What really happened with Bob Dickinson?
14. What really happened with Ted Lindauer?
    

While these are somewhat tongue in cheek, each question does indeed pose a legitimate concern--or at least ought to pose a legitimate concern for anyone who is serious about doing business with YTB.

This Week's Top 5

Wanna know what everyone is reading?  Here are the week's top 5 blog posts:

5. Dark Clouds Roll In
4. Update On Federal Suit
3. Well The Locals Love Like REALLY Don't Like YTB Either
2. False Claims Abound
and the number one blog post of the week........

1. Well, The Truth Comes Out

Sporadic Posting Ahead

Just a heads up that I am not sure how updated this blog will be for the next week or so. I had emergency knee surgery this morning and am just getting used to hobbling around in an immobilizer.

I will try, but we have some already scheduled for next week and maybe Kate can pick up the slack. I know you like her!

The Dark Clouds Roll In

Well, the Coach talks a good talk, but he seems to have difficulty on the walk. I listened to a conference call a few weeks ago and he was whooping it up about the 2nd Quarter Results. He was so excited because they were "so good" that he was going to release them early and just before the convention. Well, Jerry Brown stole his thunder there I suppose.

Well, they are out and it appears, either he can't walk the walk, or does not realize that parentheses on a balance sheet are not good. Dashes mean negative, and red is not a good color!  Here are some initial highlights and key figures:

• The bottom line is YTB lost $199,577 in the 2nd quarter which increased its year to date loss to just shy of $4 million. It is interesting to note that this time last year, the report showed an income of $1.6 million for the quarter and only a $505K loss for the year to date.  Seems like YTB is sliding to me.
• Travel sales are WAY off.  Year to date they have paid out $14.1M in commissions. That will put them near $28.2M for the year.   At an overall 10% commission that places sales in the neighborhood of $282M.  Seems a long shot from the $411M they claimed to Travel Weekly. ANd certainly not on the way to a BILLION dollars for 2006 2007 2008.  $282M puts them in the mid 30s spot on Travel Weekly, but my guess is that they slide much further (while others grow) if they make it at all.
  
• This year they have cash on hand of $632K and last year there was over $1 million.
• They disclosed that an acquisition did not go through. This is apparently the highly touted American Destinations Inc. acquisition--could I have been correct? (Caution, this is THE post, hide your children and protect their eyes the photo is still there!)
  
• Also as expected, the RTAs are leaving at a record pace. This quarter, they sold 23,296 sites (last year they sold 34, 309 so recruiting is off 32%). But 30,638 quit. So for every new site sold, 3/4 of a site left.  And on a six month basis, they are still losing more than they are selling. But, this was already predicted and expected back in May.
  
• Canada appears to be a complete bust and represents only 3% of their income and interestingly enough, Bermuda and the Bahamas are not reported at all. I wonder if they produced ANY revenue?
• The number of RTAs has only increased 30% year over year, yet the administrative expenses (salaries, etc.) have increased  100% from $13M to $26M. Seems the overhead may end up killing them.
• And of course, there is absolutely no surprise where YTB makes their money. For the quarter, in first place is website rental and sign up fees at 74.5%, in a very distant second place is income from travel at 19.7%, and bringing up the rear is training materials at 5.1%. I will say that it is slightly better than last quarter as their 6 month picture is 76.9%, 16.2%, and 6.9% respectively. Not sure those numbers will be enough to convince Jerry Brown et al, but it may be worth a try.
  

And let's keep in mind that these reflect only through June 30, 2008. They do not take into account any of the issues surrounding the recent events from California, Illinois and the Class Action suit. Nor does it include the expense of the foam prop. Speaking of which, it is strange how it has all of a sudden been devalued from $8M to $1.8M. Some things make you go "Hmmmm."

I did notice that YTB included some deferred revenue in the filing to indicate sales made that have not been paid commission. If they are accurate in this number and it is only for unpaid commissions, the sales are even further off the mark. On Page 6 it shows the "Deferred Revenue" as defined on Page 9 to be $2.6 Million. This does not seem to be a large number. That shows that each RTA has commissions owed (at some point) of about $12.

I imagine that the steady decline of RTAs in the last three quarters will only increase exponentially in the 3rd quarter. I cannot imagine how people can sell the program with the black cloud of $125M in lawsuits hanging overhead and the probability of several more.

All in all, seems like the ship is sinking and I wonder what this dismal report will do the the stock that has already taken a HUGE hit over the last week.

Well The Locals Love Like REALLY Don't Like YTB Either

This article is from a local paper called The Telegraph in Alton, Illinois. The article essentially rehashes the BBB complaints that are mounting against YTB.  But that is not the real story here.

What I found to be very interesting was the tone of the comments from the locals. Apparently, YTB is as well liked in their hometown as they are elsewhere.

Lloyd Tomer has stole money off of hard working metro east residents for years. 1st, Primerica, then something else, now this, all in the name of god. He's unbelievable. It's about time this piece of trash was held accountable by SOMEBODY! How do you sleep at night Lloyd, Scott and KIM? I'ts even more unbelievable the number of people who fall for it. It's sad. Better put those building complex plans on hold, Lloyd. Judgement day might be coming. ALthough I'm sure you'll hop in your Lexus and move on to other innocent people in other states.

I worked for YTB a couple years ago in Edwardsville.
I worked there for a couple weeks but after being assigned to "collections" for one day, I had to quit.
I went home that day, and wrote my letter of resignation. I told them I did not want to be associated with a company and would rather be broke than paid by them.
SAD SAD STORY

I went to a YTB meeting and the 1st thing out of the man's mouth was "this is a get rich quick company" There is no such thing is get rich quick. I hope they shut YTB DOWN......We don't need a travel company in Wood River. We need something for the children...

OK all you Pro YTB freaks, get a CLUE. I was on the "inside" of that company for a long long time. I left because. I got sick of all the lies and deceit from the upper "Team Members". Those who you who think you know the company so well, look at all the Tomers and Sorensens on the payroll. The company reeks of nepotism. The company has lost their IATAN status. If you are a real "Travel Pro" you will know what that means. To those who don't, it means that YTB is not a real travel agency. They lost it because of their deceitful ways. Also, I worked several conventions where it was "required" that we be there and work long hours. We were never given gas money. Oh and I was there when those firings happened, and it did happen like it was told. That company deserved to be shut down and soon!!!

Yes Amac it's a great company until you get laid off/fired like so many others these past few months. They have fired people on the spot w/ no reasons given. You wont even see it coming. Unless you are high on the totem poll I'd watch my back if I were you. I would almost put money on the fact that as soon as they find out who these employees are posting on this site they get terminated too. But like the chick who got tanked and quit this weekend said you can get a min wage job anywhere lol.

I thought it was insightful and you can read it here--please read the comments and let's discuss here!

False Claims Abound

Please pay attention around minute mark 2:00. You can earn 60% of of everything that is booked on your website!  Not misleading at all huh?

And I also believe this is the same guy that was talking about his boogers before! What was his name...Rufus!

Well The Truth Comes Out

Looks like old Coach is trying to pull a fast one on the troops. The Saturday Evening Post hoax was nothing more than pumping his own ego. Here is the cover of the real edition. Don't believe me? Go to your local bookstore!

The depths of this guy's ego knows no bounds!

And here is his version:

Blockbuster Convention Announcements

We heard the hype and now here is the reality. Here are four of the blockbuster announcements from the convention:

1. There is an enhanced Rep site. For a monthly fee of only $14.95, you'll gain access to one of the most powerful recruiting tools in YTB. Not only will prospects be impressed by the innovative design, they'll be able to see what YTB is all about through the Media Center!
2. You can buy a DVD. In a slowing economy where the price of gas is nearly $4 a gallon, many Americans are hurting financially. Give them an answer to their needs with this informative DVD, which explains why they should look into owning their own business with YTB and "Recession-Proof" their income! Available soon from your Back Office!
3. The bonuses are being tweaked. Here at YTB, we want to give you every opportunity to succeed! That's why during this year's convention, we've enacted this one-time only Reset Bonus! Basically, everyone will be working on their first set of six towards a $1,000 Leadership Bonus. Don't worry, you won't lose anyone, you just won't have to worry about fall-off on the ones you've already earned a bonus for.
4. Coach was in a magazine. One of the most prestigious magazines in the country has chosen Coach to be on the cover! The Saturday Evening Post, the longest running continually published magazine in the history of the United States, has selected Coach to be on their 2008 Special August edition. The magazine features a four-page article on Coach's life and gives you an inside look behind his vision to create 10,000 millionaires. Available soon in your Back Office. Price: $4 each.

Whole lot of travel info out there. But let me comment on a few items.

I thought the current websites were the best in the industry. Now they want to take a "free" opportunity and charge $14.95 per month. And this one is good for your "prospects" to see about YTB. I think prospects can see enough about YTB by googling them to be honest.And this seems like it might more clearly define YTB as a pyramid....taking money for recruiting only.

Buy a DVD and recruit more people. Instill the fear of the recession in them and learn how to bilk them for $449 and $49.95 a month. And if you are good, you can sell them the upgraded website.

The bonuses are being reset. This is a key point. In the old system if you had a power team of 6 people and two dropped out, you needed to recruit 2 to reclaim that status and then recruit 6 more to get your next bonus. They are resetting this so that if 2 drop out, you do not need to replace them with 8 you can just get 6. This is damage control. With the news this past week, there will be plenty of people dropping out. And when they drop, the income of the upline is affected and then they will drop. That's the way the pyramid crumbles. But by not requiring a replacement of the drop outs, they are hopefully holding onto some of the upline. Very shrewd on the part of YTB. I wonder how many of the Reps will get it?

And Coach was on a magazine. While I have not seen the magazine yet in the stores, I am not wondering if it was not a paid cover. YTB refers to it as a "Special" edition. Perhaps they did a special cover and inserted the story in the magazine for the convention. Anyhow, you can buy it for $4. If anyone has seen the August issue in a market other than St. Louis, let me know who is on the cover. My suspicions are now leaning toward a paid cover and story. But I guess if you can't get good press you might as well buy it!

So, where was all the wonderful travel training and the travel announcements? If you want to see a video of the convention, it is accessible in the new Rep site link above. Or click here.

Update On Federal Suit

According to Travel Weekly, this suit was filed for $100 million dollars.  Wow, that is $125 million in less than 5 days.

Two former referring travel agents for YTB Travel Network launched a class-action lawsuit in U.S. District Court in East St. Louis, Ill., seeking more than $100 million in actual damages for themselves and others who invested in the YTB programs.

They claim they and the members of their class suffered financial losses because YTB International and its divisions operated an illegal pyramid scheme.

The lead plaintiffs are Faye Morrison of St. Louis and Kwame Thompson of Atlanta. One of their attorneys, Christian Montroy, said that because the lawsuit is so new, it is uncertain how many plaintiffs are in the class but “certainly more than 1,000.” He said two more plaintiffs will be added to the suit in the next week.

YTB Withdraws Application For AMEX Listing

In light of the recent lawsuits and investigations, YTB has withdrawn its application to the AMEX.  I imagine it was more in lines of a request that they withdraw.

YTB Executives Being Sued In FEDERAL Court In Illinois

Developing story....but from the Alton Telegraph:

The suit, filed Friday in U.S. District Court for Southern Illinois, names two specific plaintiffs, Faye Morris of St. Louis and Kwame Thompson of Atlanta, Ga., but seeks class action status on behalf of potentially more than 1,000 people who were members of the YTB travel network, either as independent marketing representatives or referring travel agents.

Revisiting Ted Lindauer And His Threatened Suit

Ted Lindauer and his warnings have been a topic of interest this week as well. Many people have asked me about the letter to the Board of YTB.

Read the documents from Ted Lindauer and make your own decision if YTB had been warned to clean up their act or not. Remember, this is a man who was loved by YTB and when the issues were brought to light, he mysteriously fell from grace. When he went public with his accusations and threatened a lawsuit, all of a sudden he disappeared again. For a period, he had a statement on his website that he and Coach spoke and worked things out. There was no detail to clarify that statement, but now all that is there is a copy of his resume.

Calls to YTB at the time indicated that he did not work for the company any longer, yet many Reps have indicated that he does indeed still work for the company. Please look at this post and you can see and hear it from someone that apparently (in his mind) knows!

My guess: Ted got a big check and a thick agreement to never talk about YTB again.

The letter that appeared on his site and the subsequent letter to the Board of Directors of YTB can be found here.

Attendance Records?

While the spin machine is claiming 18,000 for training and 23,000 for the opening ceremonies, I am hearing a completely different story from a journalist that was there.

I went to the opening session of the convention yesterday. There were a lot of people there, but not as many as I think they'd hoped.
They said 18,000, and with no independent way to confirm that, that's what I put in my story about it. It's possible that they had 18,000, but they came nowhere close to filling that room (basically half the Edward Jones Dome). It might have been 15K with some optimistic estimating going on.

Now is we take the generous 15,000 (and mind you this is coming from a journalist in St. Louis that knows what a full dome looks like) you need to wonder how many are actually affiliated with YTB and have singed an agreement? They were encouraged to bring friends, family, and guests. In a comment I thought maybe 7500, and that seems to be about right if everyone brought a spouse.

Well, it is becoming pretty clear that there are false claims on all fronts with YTB.

This Week's Top 5

Wanna know what everyone is reading?  Here are the week's top 5 blog posts:

5. Illinois Attorney General Launches Investigation
4. In The Hot Seat With John Frenaye
3. The YTB Response
2. Firemedic Throws Stones In Glass Houses
and the number one blog post of the week........

1. California Launches Suit To Topple YTB


No real surprises here. But when you look at the entities that are reading this blog now, it is interesting. YTB has taken a multi times a day interest. From the list of YTB suppliers, I have to say that 90% of them have checked in daily since Tuesday. And there are a lot of domains ending in dot gov reading now.

Live From St. Louis

The spin continues and it is amusing.

It seems the YTB defense will be that the Attorney General does not understand network marketing. Perhaps the Attorney General feels that YTB does not understand the concept of the law. But Doug said that all will be well so we need to take him at his word and sleep soundly. Especially the California Directors...aka Does 1 to 100. If anyone has a direct line to Jerry Brown, please let him know that Doug has handled this and there is no reason to go forward. It is a simple misunderstanding!

To those that do not understand satire...that was an example. But Doug did make a few points that should be pointed out.

In YTB there are two separate companies. Yet the Directors (one of the companies) are the ones instructing the travel(the other company) training classes. This seems like they may not be so separate at all.

The last two days have been spent in training classes from some of our Directors that have been exceptional to say the least.

He also talks about a smirk

I’ve seen more of a steely eyed smirk on most of the faces here.

Well, if anyone has met Scott Tomer, you know that look. It is nothing new and it is the same look he has when heading to the bank depositing all the RTA monthly fees.

And finally in another attempt at deflection we have this:

YTB is on the map folks and if by chance, you are not here in St. Louis today, head on over to any newsstand and book store and take a gander at who is on the front cover of the Saturday Evening Post this month.

Well, I am not sure they are "on the map" but they certainly "in the scope". It is a nice fluff piece in the Saturday Evening Post (although the link points to a Tony Bennett cover) and I can assure you that some columnist (anyone know what Dan Rather is doing these days) is getting some heat for not fact checking as well as he should have. What an embarrassment for the Saturday Evening Post to print a piece like that and have Coach be the target of the largest suite ever filed in the US against a MLM company/ Maybe they can do a "Fall from grace" piece in s little bit.

Protecting Professionalism

This was just published by Travel Research Online and I think it is an important point of view that needs to be shared:

Protecting Professionalism

This week's announcement that the California Attorney General's office was filing suit against YTB is now being followed on by an investigation by the Illinois Attorney General's office. It is welcome news that the states are finally taking action against the card mills and MLM companies that have turned an untrained evangelical horde onto the streets claiming to be travel professionals.

The battle is far from over. There is always another permutation of these companies flying under the radar. But what is remarkable in this particular instance is the way in which the travel media at large failed to take up the cry. True, Royal Caribbean and a few other suppliers cut card mills out of their rosters, but where was the travel media? By and large they actually became hives for MLM "travel agents". The bulletin boards and the online portals of major travel media outlets became at best a place where the issue was debated in an almost embarrassing fashion or at their worst where the MLM'ers actually held sway. YTB was placed on a "power list" by virtue of its "sales volume" without any serious journalistic questioning of its business methods or its impact on professionalism. I suspect that an analysis of the ranks of the circulation, electronic and print, of many of the media outlets would reveal an uncomfortably high percentage of pseudo-agents.

It is time for the media of the travel industry to take a real editorial stand on this issue, to get off the fence and denounce the business practices of companies that crank out travel agents in an assembly line fashion with no training and no real passion for the business. While the efforts of suppliers are appreciated, their concerns are not the same as that of retail travel professionals. It is the media that claims to be the voice of the retail travel agent and it is the media that can best amplify the efforts of travel agents who have taken a stand against the card mills and MLMs.

Richard Earls
Publisher
Travel Research Online

To the trade media I ask are you listening? Do you agree? Will you act? Agents reading this--please pass the message along!

Bermuda Takes An Interest

According to the Royal Gazette, Bermuda is interested following the charges as well. I know when YTB launched in Bermuda, they were questioned for being a pyramid scheme (here and here)  as well, but apparently their argument was persuasive enough to allow them to go forward and recruit 700 Bermudian citizens into the program.

A recognized authority on MLMs has told me that in the MLM business, international expansion can lead to federal inquiries. Foreign governments can see that the US is sending their "trash" to operate in their country, and now the Stste departments begin to talk. Before long, State asks the FTC to find out what is going on and then the FTC brings out the hammer.

So Bermuda and Canada might be worth watching in the coming months.

BBB Documents Many Complaints Against YTB

According to the BBB, the number of complaints against YTB has soared in the past year.

The woes of the YTB travel operation widened Thursday when the Better Business Bureau went on record with complaints it says it has received about the company in at least 31 states. "We've been monitoring the company for a little while. In 2008, the complaints really exploded," said Scott C. Thomas, a trade practice consultant with the Better Business Bureau of Eastern Missouri and Southern Illinois.

The BBB complaints are certainly not unfamiliar to YTB. I have a letter dated May 14, 2007 that addresses to the BBB essentially the same issues the Attorney General alleges. What is interesting about this letter is that it is entitled:

BBB LTR St Louis-Director Version.pdf

That begs the question--what was the "version" sent to the BBB in response to their inquiry? Perhaps this version was a little different to give the illusion that all is well in Wood River?

I am not sure we will know, because it was penned by Thayer (Ted) Lindauer who was their attorney at the time. If you are interested in the backstory of Ted, he was fired, contacted YTB and explained what was coming down the pike and how they were operating illegally and threatened a lawsuit on behalf of shareholders. Very quickly he was silenced. You can draw your own conclusions. We posted about Ted here and here. I also have copies of Ted's letters to YTB and their Board.

NOTE: Per request, the BBB letter can be found here. For me to upload it to my server, I need to have single word names and the change of the file name to BBB was mine

The FAQs According to MLM

One of the things that is out of the California Attorney General's reach is professionalism.  It has been the position of this blog for almost a year that YTB has put forth an army of untrained, unprofessional people masquerading to the public as travel agents.  This is something the AG will not be able to rectify and it falls squarely on YTB. But will they? Do they care? After the suit is tried or settled, will it even matter?

This is all from The YTB Blog: YTB, The Greatest Home Based Travel Business... any comments? Good FAQs or bad?

What if I [or my client(s)] need to cancel my flight, hotel, rental car, etc?
You (or your client) will need to call vender directly that you booked it with on your site, and make sure you have the booking number and the credit card that was used for the booking.

Is YTB corporate working to get re-installment of the IATA/IATAN?
Yes. YTB and our legal counsel are actively working with IATA/IATAN to resolve this issue and substantiate that YTB meets or exceeds both IATA/IATAN's regulations and our own high standards.

What is the difference between ARC and IATA/IATAN?
ARC (Airlines Reporting Corporation) is the organization that certifies us, and other travel agencies, to book travel and conduct business. We are in good standing with ARC. IATA/IATAN is a global trade organization, but their activities and accreditation do not have any effect on the day-to-day running of our business.

I just joined as an RTA. If I want to book some hotel rooms, it appears that I am getting the same Hotel.com rate with or without YTB. Do I get a preferred hotel rate as an RTA or do I only get a commission fee back later?
Yes, you will receive a commission if you book ANY hotels through your YTB travel portal. Keep in mind that YTB will retain 40% of the commission. You will retain 60% of that commission.

If you want the wholesale pricing, you'll want to negotiate with the hotel (keep in mind this is a travel 'perk', not a travel 'right', so the hotel may say, "NO")

You'l be negotiating a "travel professional discount" (these are the the words we recommend)

Is there a link that shows the "successful" memebers? Just wondering, because most other companies have a "success stories" link.
Our Coach's Corner Section and Director's Corner are our successful members.

If I become an RTA is it true that I can get a 60% discount on my personal Disney vacations?
Its true Various Perks are available to RTAs. The perks are subject to change. Contact Disney to determine the updated discounts.

Can you use frequent flyer miles to book trips through ytb web sites?
If your question is can you gain FF credit through the ytb sites, the answer is yes.

Disney...are you reading this?

Info From California Attorney General

The Attorney General has a web page set up for people to make a specific complaint or to tell their story directly to an investigator. If you feel you were misled by YourTravelBiz.com you can enter your complaint and one of the investigators will respond to it.

Access the online page here

Illinois Attorney General Launches Investigation

Well, as I suggested, it did not take long for others to begin to wonder if something was amiss in Wood River.

The Illinois Attorney General has launched an investigation of YTB and is charging them with defrauding investors. Of course there was no comment from YTB.

I wonder if the shady dealings between Beryl-Martin and YTB will come to light now since one of the companies is headquartered in the state.   Remember, Beryl Martin is owned by the two Tomers and Sorensen!

So, Does YTB Really Want To Sell Travel?

The Attorney General has claimed that YTB does not sell travel.

So I was doing a little bit of research on-line when I came across the most interesting question that was posed by none other than a YTB member named Angelo. I copied and pasted the question directly from the message board in order to avoid any sort of misrepresentation.

“OK, here is a tough question. Please give me a straight answer, not the company line. I trust you guys.Our leaders are our directors right? So why is it that in a "Travel Company" you do not have to sell travel to become a Director?Let me explain. I can sell $1 million in travel in a year. And sell no travel stores. So I am a master at selling travel, yet am nowhere near being a director of a travel company.So why not have two sets of directors? One set for the Travel side of things and One Set for the Marketing side?There is no one I could go to, that is top tier to let’s say, discuss sending 100 people to China for the Olympics. Or a Director that is plugged into the major vendors we work for. Like Carnival or NCL or Princess.”

Now, we’ve all heard YTBers say things like “Oh, we sell travel. Why I’ve sold $100,000 this year myself.” Or, “I book groups all the time.” Or, “look at my cocaine white Bentley I bought with all the money I made selling travel.” But if YTB is really a travel company, and didn’t deserve to get the boot from IATA, Royal Caribbean, and others, then why is it this company in no way rewards their members for selling travel? Have you ever heard of a travel agency that doesn’t reward its staff for selling travel? Am I the only one here that is confused by this? Maybe one of the suppliers could help me understand this better.

P.S. Angelo, if you’re reading this, please go to ASTA or OSSN and find a real host agency!

News From The Convention Floor

Fighting for truth, justice, and the YTB way! Our very own Clark Kent Travel-Pro is reporting from the convention floor. The report was extensive, so we are including only excerpts.

I would urge anyone who is not here in St. Louis to get yourself to the Opening of our Convention at the Edward R. Jones Dome, Friday morning at 9:00am Central Standard time. The company has decided to postpone the unveiling of our Lady Liberty and dedicate the first 15 minutes of our opening specifically addressing this issue before we move into the Second Phase of YTB.

How un American. How can Liberty be put on hold? Oh wait, this "Liberty" is a fraud. Must be the theme of the convention.

We can not express how important it will be for you and your YTB business to see first hand what our Founders and our Legal Team have to say. We want to give you ample opportunity to hear first hand just how we will vigorously fight this personal attack" and why we believe we have a very solid shot at prevailing and inning the frivolous lawsuit.

Recruit to the death! Must recruit! What is Coach gonna say that he already has not? If he talks about it to 20,000 people his ego has finally been eclipsed by his stupidity!

Make no mistake, this suit was a personal attack towards YTB and the Traditional Travel Agents are behind what is going on. The timing of this suit was far too orchestrated and calculating for it not to be, as an embargo was put on the release of this suit until 10:00 PM Pacific Time on August 4th. Just 1 day before the opening of our National Convention.

The TTAs are flattered that you feel we orchestrated this. I am pretty sure the attorney general might feel otherwise. And just how is it that YTB has been negotiating this for 18 months and the TTAs have been actively campaigning for only 12? Travel-Pro...make sure you attend a math class at the University!

In addition, California has also filed suites this year with Heinz, Frito-Lay, Kettle Foods, McDonald's, Wendy's, Burger King, KFC, Pepsi, Proctor and Gamble, AOL, and Country Wide Home Loans just to name a few.

Travel-Pro---take spelling as well. Those "suites" they filed. Can you show shere they were intended to topple McDonalds, Burger King, Et Al? Most likely it was for something less than scamming hundreds of thousands of people out of money. I mean McDonalds has screwed up my order on occasion, but to my knowldge they never scammed me. And to boot they don't use styrofoam! And it seems like all of those companies actually pay people to work for them. Not ask people to pay to work for them.

If however you want to be part of the battle with another State just like Florida in 2006 and Rhode Island in 2007, both of which YTB prevailed, I urge you to be in the Dome Friday morning. Our National Convention has more than 20,000 Reps and RTA getting the same play at the same time from Founders and Leaders and we have plenty of room for you.

Wait a minute, for the past year you have said YTB has never been investigated. Please decide which side of your mouth you want to speak from.

Coach, Scott and Kim know how to handle this, they are handling this, and we are not going to hide. We recommend that you stand tall with us on Friday, August 8th at 9:00am when the play is called.

So Coach is calling another play? We saw how well the play turned out when you sold the Carnival certificates in November. The Olympic play was also a good one. Heck, it seems that his play on the two cruises did not work out too well. If the lemmings will not get behind him during good times, what are they gonna do now? And what is he? A coach, pastor or what? Or does it depend on the audience? And what team does he coach? And why does he have only a corner when most coaches have fields or courts? But I am sure he is pleased that you got one more recruiting pitch in!

It should also be noted that if anyone tries to contact you about this suit, please forward any questions and comments to media@ytb.com, and let our Company handle this battle. This is their responsibility, not yours.

Oops, you maybe should tell that to the people at the convention that are talking to the media out front. When you have 438,000 people in a scam one never knows what they will say. And to be honest, the ones that are quoted so far, have not really shed any type of intelligent light on YTB. Note to those that do talk to the media...calling the Attorney General an idiot doe NOT help the case.

See you at the Convention!!
Doug & Ronda BauknightAKA:
TravelProTravel Agents / Network MarketersYTB Travel NetworkPhone:
678.458.5812

OK, one last pitch!

Well there it is, live from St. Louis! All is well and the Coach is going to address the 3,600 Reps and RTAs that are in attendance on Friday. Wait...3,600 you say? Well, yes, 1,600 is the number of people that are Reps and RTAs. The remainder of the reported 22,000 are family and friends. The attendance figures do include friends, neighbors, children, aunts, uncles, and anyone else that wants to attend. You see, even the play called for the convention was a disappointment and they (like the cruise) decided to give it away. After all, it is all about recruiting.

Don't expect too much on Friday other than a round of Kool-Aid and soothing music assuring you that it is all a misunderstanding. Have we heard that before?

--Kate Holmes

PS: Tell Candi May that all of her travel agent friends say hello. And please tell Dr. Bob Seligman we are thinking of him!

Irony At It's Finest

Just over a week ago on the Coach's Conference Call, cheers erupted when the masses were informed that the Travel Weekly story on the YTB franchising concept was the #1 read story at Travel Weekly and the #1 emailed story at Travel Weekly. After that announcement there was some rhetoric about being the #1 agency in the world and how there were already "one thousand more than twice what they had registered for the convention about this time last year"--and more cheers.

No doubt the opening line this morning will be that they are indeed #1 and #2. According to the St. Louis Post-Dispatch (at least at the time of posting) YTB held the spot for the most popular article emailed, and the #2 spot for the most read article!  The article title?

Calif. AG sues local firm YTB, calls it 'pyramid scheme'

If you are interested, the Post-Dispatch will be covering this story from the convention so there likely will be updates including this one from this morning where the St. Louis Post-Dispatch (YTB's hometown paper) wonders "Is it the future of travel? Or "a gigantic pyramid scheme?""

Some Thoughts On Yesterday's News

Well, yesterday's news should have come as no surprise to anyone. It was bound to happen and it could have been one of 50 AGs or some Federal authorities. It is quite likely that there will be additional actions being taken with similar claims of deceptive and unfair business practices and of course running an illegal pyramid scheme.

In looking through some forums yesterday, it seems that there are many at YTB that simply have this blind faith in YTB and will take whatever is told to them at face value. Before doing that, please remember how long it took for YTB to disclose the termination by Royal Caribbean and the loss of the IATAN accreditation.  Management was not exactly forthcoming.

Yesterday's news was not a surprise to the Management. They had been trying to prevent this day for 18 months and apparently have failed. As Mark Ewing has pointed out in his YouTube Video and in a comment on this blog, this is not IATAN or a vendor, this is VERY serious ande has some very far reaching implications for YTB, their Management and yes, even the Reps and RTAs that may not have been 100% ethical in their recruiting. The AG is looking for yet unidentified defendants.

If you are a Rep or an RTA in California, I woudl think a call to your attorney (not Pre-Paid Legal) woudl be a good investment. If you are a Director in California, I would definately make an appointment, because it is likely you will be named in this suit and you will be required to defend yourself. Do not count on YTB to do it for you.

As I mentioned, Mark Ewing has a very fair and balanced (sorry Fox) perspective on this:

The YTB Response

YTB has responded to the suit:

On August 4, 2008, a civil action was filed against three subsidiaries of YTB International, Inc. (the "Company") and certain executive officers of the Company in the Superior Court of California, County of Los Angeles, by the California Attorney General. The complaint alleges that the defendants violated California's unfair competition and advertising laws. The Company believes it has operated in full compliance with California law and intends to vigorously defend the case.

The complaint was filed after eighteen (18) months of dialogue, initiated by the Company with the Attorney General to discuss the implementation of a new California law's potential effect on the Company's business model. Throughout these discussions, which broadened over time, the Company has consistently cooperated with the state's information requests and provided detailed evidence in face-to-face meetings explaining how and why the Company's business model is in full compliance with California law. The parties recently came to a standstill and the August 4, 2008 complaint is a result of this standstill. The Company believes it has meritorious defenses to the claims, intends to advocate its position aggressively, and believes it will ultimately prevail in the case.

Scott Tomer, CEO of the Company, stated "we are disappointed that the state has decided to take this action. We firmly believe that the facts in this matter support our position and our legal counsel has advised us that our position is strong. The Company will vigorously defend this matter and we look forward to having the courts decide the merits of our case".

The Actual Suit

If you are interested in reviewing the actual suit which was filed in The Superior Court of the State of California, I have made it available for download.

It is a PDF file and it appears that in addition to the four named individuals they will be pursuing up to 100 other individuals to be named at a later date. I have been told by a local attorney, that the phrase "Does 1-100" typically does not indicate a specific number, but rather that there will be additional people enjoined in the suit.

It appears that at this time, this is only a civil matter.

California Launches Suit To Topple YTB

I am not sure there is much more comment I can make, so here is the notice I received from the State of California late last night:

Embargoed Until 10:00 p.m. Pacific Time on August 4, 2008
Contact: California Attorney General's Press Office 916-324-5500

Ca. Atty. Gen. Brown Sues To Topple Online Pyramid Scheme

LOS ANGELES--California Attorney General Edmund G. Brown Jr. today sued YourTravelBiz.com for operating a gigantic pyramid scheme that recruited tens of thousands of members with deceptive claims that members could earn huge sums of money through its online travel agencies.

“YourTravelBiz.com operates a gigantic pyramid scheme that is immensely profitable to a few individuals on top and a complete rip-off for most everyone else,” Attorney General Brown said. “Today’s lawsuit seeks to shut down the company’s unlawful operation before more people are exploited by the scam.”

YourTravelBiz.com and its affiliates operate an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scam. Once enrolled, members who join the pyramid scheme earn compensation for each new person they enlist, regardless of whether they sell any travel. The company lures new members by offering huge income opportunities through online travel agencies yet the typical person actually makes nothing selling travel.

According to company records there were over 200,000 members in 2007 who typically pay more than $1,000 per year--$449.95 to set up an “online travel agency” with a monthly fee of $49.95. In 2007, only 38 percent of the company’s members made any travel commissions. For the minority of members who made any travel commission in 2007, the median income was $39.00--less than one month’s cost to keep the Website. There are at least 139,000 of the company’s travel Websites, all virtually identical, on the Internet.

YourTravelBiz’s extensive marketing materials include videos of people driving Porsches and other luxury cars, holding ten-thousand dollar checks, and claiming to be raking in millions of dollars in profits. The company advertises through its Website www.ytb.com, and at conventions, workshops and nationwide sales meetings which have been held in California locations such as Los Angeles, Sacramento, San Francisco and San Diego.

Brown charges the company, its affiliates, and the company’s founders J. Lloyd Tomer, J. Scott Tomer, J. Kim Sorensen and Andrew Cauthen with operating an “endless chain scheme,” an unlawful pyramid in which a person pays money for the chance to receive money by recruiting new members to join the pyramid. Brown also charges the company with unfair business practices and false advertising practices including:

* Deceptive claims that members can earn millions of dollars with the company
* Operating without filing legally mandated documents with the attorney general and the Department of Corporations
* Selling an illegal travel discount program

Under California’s unfair business practices statute, the company is liable for $2,500 per violation of law. Attorney General Brown is suing YourTravelBiz.com to get a court order that:

* Bars the company from making false or misleading statements
* Assesses a civil penalty of at least $15,000,000 and at least $10,000,000 in restitution for Californians who were ripped off by the company.

From August 6 through 10, thousands of members are preparing to travel to St. Louis for a national convention to learn new techniques to recruit more victims into the illegal pyramid scheme. Last year at least 10,000 people attended a similar national conference. For more details on the company’s plan to perpetuate its scheme visit:

http://www.yourtravelbiz.com/bizRep/BizReports/BIZREPORT_07-18-08.htm

For more information on pyramid schemes visit:

http://ag.ca.gov/consumers/general/pyramid_schemes.php

Any consumers who believe they have been bilked by YTB should send a written complaint with copies of any supporting documentation to:

Office of the Attorney General
Public Inquiry Unit, P.O. Box 944255
Sacramento, CA  94244-2550

Or through an on-line complaint form:
http://ag.ca.gov/contact/complaint_form.php?cmplt=CL.

Today’s lawsuit against YourTravelBiz.com, filed in Los Angeles Superior Court today, is attached. The lawsuit also names affiliates which include YTB Travel Network, Inc., YTB Travel Network of Illinois,Inc., as well as the company’s founders J. Lloyd Tomer, J. Scott Tomer, J. Kim Sorensen and Andrew Cauthen.

# # #

The $64,000 $25,000,000 Question

This is just developing, but there appears to be huge news tomorrow and if my sources are accurate, this will be bigger than Lady Liberty!

In The Hot Seat with John Frenaye!

Recently, it was leaked that John Frenaye had indeed jumped the ship like Vicki Freed did several months ago and joined forces with YTB. Rather than rely on rumor and innuendo, we decided to call John and ask him directly. He agreed to an interview with periodic contributor, Kate Holmes. Kate asks the hard questions and puts John in The Hot Seat.

Q. John, after years of a very outspoken campaign against YTB, you decided to join YTB as a rep. What prompted you to make this move? Well, I can't really talk about that, and I heard that news too. But thanks for asking.

Q. Now that you are in YTB, can you tell us more about the franchise model? Well, all I can say is that YTB knows how to recruit and knows network marketing.

Q. Where do you see YTB in a year? The future is hard to predict with so many positive and great changes coming out at the convention, but I am suspecting at 1901 E Edwardsville Road in Wood River.

Q. The travel industry has never embraced YTB despite its claims. Could you explain this? All I can say is that YTB knows how to recruit and knows network marketing.

Q. Can you please explain the reason for your switch to YTB? Well, I can't really talk about that, and I heard that news too. But thanks for asking.

Q. We've all been waiting to hear more about this franchising manual. Now that you are in YTB, can you tell us more about it? All I can say is that YTB knows how to recruit and knows network marketing.

Q. How many people do you currently have in your downline? Well that is not a very easy number. The economy has not been too good lately but I have heard that YTB has more now than they had a while ago. And that came straight from the President's mouth!

Q. How many people in your downline will become franchisees? I can't really talk about that but I do know that if people do not participate they will be no worse off than if they hadn't participated in the first place.

Q. How much of your YTB sales comes from travel? From website sales? I cannot really discuss any income that I may or may not make; but you can be assured that any income I do make does indeed come from somewhere.

Q. We understand YTB recently paid itself over 6 million dollars for a giant hunk of foam to honor the troops. Can you please tell us a little more about this? Are you anti-American? Do you not support the troops? Do you feel honoring them is a bad thing? And the correct figure I have heard is $8 million plus transportation, installation, and taxes. It has also been said that YTB HQ is a green building.

Q. How are the upcoming changes to the CLIA card going to affect YTB's recruiting efforts? What perk will you advertise now? Well, perks are really a fluid concept depending on the prospect. You need to determine the touch points and go from there.

Q. You recently became an ordained minister. Who has influenced you more in this decision? Was it Coach? Regina Osei? Father Guido Sarducci? My ascension into the ministry is a personal decision and it was influenced by none of the above. I also heard that chicks dig men in robes, we get some awesome tax write offs and some great parking spots at the local mall.

So, there you have it from the source. All of the confirmation anyone needs about John's recent switch to YTB.

John is a swingin’ bachelor, father, mentor, coach, ordained minister, and makes a mean lasagna! He wears a lot of hats but loves them all! To learn more about more about fabulous opportunities please join his downline at www.ytb.com/jfrenaye.

--Kate Holmes

This Week's Top 5

Wanna know what everyone is reading?  Here are the week's top 5 blog posts:

5. Now Here Is Some GOOD Recruiting
4. Damage Control On Franchising
3. Oh Oh...This Might Be A Problem (We Don't Need CLIA)
2. Firemedic Throws Stones In Glass Houses
and the number one blog post of the week........

1. A Puppet Tap Dances


And, don't forget to rate these entries. You can vote with the little stars right below the SHARE icon. And, if you are in any social networking sites, be sure to share our posts with your network using the SHARE button.

Firemedic Throws Stones In Glass Houses

Hey look, it's Firemedic 227!

Yesterday, our very own Firemedic was chastising people for calling other people names. I told him that people in glass houses ought to not throw stones Here was his reply:

firemedic227 said...

John,

I am speaking for myself here but have you seen me calling people names and making personal attacks? I don't need to because I recognize we are all people with the same desires to succeed. We just may have a current disagreement on what is the best way.

Jul 31, 2008 7:07:00 PM

Well, it's funny he should ask. I just discovered a blog where our own Firemedic does not practice what he preaches. As I said, people in glass houses should not throw stones. You can read all about it over there......

firemedic227 said...

Yeah this guy is a tool. He posts all kinds of stuff on YTB and doesn't allow comments to his videos that prove what he is saying is wrong. He is like the communist governments that censor what is being said. The reason he attacks YTB is because YTB is a threat. Think about it. If a company isn't doing anything then there is no reason to attack them. Problem is that Mark doesn't know crap about YTB except for whatever bad press he can find. Look for bad press about any company and you will find it, especially if they are making waves in the travel industry.

Mark is straight up dishonest and a true scammer. He doesn't hold a candle to the founders behind YTB. He has never stepped foot through the front doors of YTB even though he is invited.

As we all know, 95% of all businesses fail in the first 5 years. Mark and his scam have not paid the dues yet. YTB has gone well past that. Mark is the one who will have egg on his face in the end unless he smartens up and joins. I mean, there are people WAY smarter than his joining YTB. I mean WAAAAYYY smarter. We are talking very credible published economists with PHDs joining!!! and just last year!!!!!.

May 22, 2008 8:09 AM

And this one.....

firemedic227 said...

Mark likes to point out what the average person made in YTB last year as if that is a bad thing. What he doesn't do himself is publish what the average person made with his scam last year. YTB puts it right out there for everyone to see. Why doesn't Mark? Hmmmm. YTB has nothing to hide and as a matter of fact they sought to be publicly traded for that reason!!! That's integrity.

Think about this. Ever known someone at work that talks bad about everyone around them? Do you think that person talks bad about you when you are not there? You bet they do. That's because of their own insecurity. They attack anyone perceived as a threat for their own securtiy reasons. Mark must be terrible insecure about what he is doing to attack YTB so obsessively. I mean, if his business was so great why would he need to be so negative on YTB?

May 22, 2008 8:14 AM

And this one...

firemedic227 said...

Cathy Larson,

You asked about proving that Mark Ewing is dishonest. Let me start by saying that Mark is very crafty in his wording. He uses words like "seems like" and "appears". He then tries to back peddle when he says things like "but if you are in to MLM then more power to you."

Let me ask you this. Is withholding vital information honest? I would say that it is not. If you look at any of Mark's videos and look at the blogs you will find that the majority of the comments are negative towards YTB and if there are any comments in defense of YTB you will also notice that Mark always has the last word. Wonder why? That is because he blocks comments that he does not approve. If he his rebutted and proven wrong, you will never hear about on his blog. If he is wanting to get the truth out there then why would he censor replies. I believe he only wants his version of what he believes YTB is all about out there. I have to admit he is skilled at getting his videos out there. He has them on every negative site about YTB.

Mark has been invited many times to come and meet the founders of the company, tour the company, and actually experience the motive behind the company. What better way to understand the true intentions of a company than to walk through the doors? Mark won't because that does not fit his agenda.

Mark picks and chooses the information he shares. It's like saying a cop shot an elderly man. Sounds really bad only getting part of the story when in fact you find out that the elderly man was holding a gun to a child. Now I know that sounds extreme but the point I am making is that Mark will only share part of the truth. Just like his video on Royal Carribean. What he won't tell you, and he clearly knows, is that Royal Caribbean is down %34 in sales and is talking about layoffs. YTB is up %176 in travel sales since this time last year. These are facts. Mark knows this and has privy to the same information but you won't hear him talk about it. He is only interested in the negative.

Ask Mark to share what the average person made with his company last year. He won't.

What is curious is your comments that our blog here hurts us more than it helps us yet Mark is absolutely obsessive about attacking us. I use the word "us" here too because YTB is real people that really care. Mark censors comments, doesn't allow the full truth to be told, and makes all kinds of insinuations yet you feel we are the ones perhaps out of control here? Let me ask you this, if Mark is so focused on the negative of everything he can find and blog about with YTB then how can his program be so successful? How does he have the time? We have nothing against him personally but his actions have been less than honest.

July 28, 2008 3:11 PM

And this one...

firemedic227 said...

Think about this. If Mark Ewing was not attacking YTB every chance he got how else would he get the amount of FREE advertising he gets? Why attack YTB and not the other companies out there? Because YTB is the biggest and most talked about. Actually it's quite creative but not exactly honorable business practices. So you see Mark using YTB to further his business. What you don't see is the founders of YTB attacking other travel business like that. They don't have the time nor the desire to practice business that way. They have higher standards than that. Mark knows there is no better way to draw attention to his opportunity than to vehemently attack the number one. And if that means telling half-truths and making blantantly false insinuations then so be it.

YTB sold more travel in one month last month than all the other network pretenders out there combined! They grew over 176% since this same time last year. They are up from the 35th largest to the 26th now and had the largest rate of increase over all travel agencies. These are facts as quoted in Travel Weekly of which Mark subscribes. He knows this but you won't hear him talk about any of the positive. Now let me ask you...is that someone you want to be in business with? Honestly? There is a law out there , and I do mean LAW, that states that for every action there is an equally opposite reaction. Biblically speaking it's called sowing and reaping. If Mark thinks he will not sow what he reaps then he will most likely be in for a surprise. The founders of YTB know this. They are morally driven people. They also understand that with great success comes great resistance. They are not afraid of it. All great companies do.

Check out a video by TruthandTravel on youtube called "YTB Bad Press".

What Mark and others like him don't take into account is the moral intentions of the founders and people of YTB. Mark and others like him only make YTB stronger. The more resistance they get, the closer to becoming the number one travel agency they become.

July 28, 2008 8:55 PM

So Firemedic, are you really one who does not call people names? I lost count how many times.

And since you are apparently in the know, can you please provide contact information for the "published economists with PhDs" that have joined. I assume you are talking about Dr. Seligman--the phantom RTA!

YTB sought to be publicly traded because they were ethical? Do you even know how YTB came to be publicly traded? It was not because they sought it. They acquired a public company, so there was no investigation or scrutiny by the SEC. However, I might point out that it was shortly AFTER YTB took over that the SEC did investigate and delist them for irregular and inconsistent accounting practices. That is usually a FACT left out of the Red Carpet Day presentations.

However, I am glad you have taken the position you have about moderation on blogs. It is a shame when someone's opinion is so one sided and they get tired of defending a false premise that the only option is to delete comments that do not agree with him and ultimately just prevent anyone from commenting at all. As you said, these types of bloggers are just like the Communist Governments.

And as an aside to Doug Bauknight...are you gonna let this Firemedic guy call you a commie?

PS: Welcome to the my own little version of Coach's Corner. We call it the Dumbasses Den--please meet your denmates, Earl Allen Boek, Proud To Be YTB, Doug Bauknight, YTB & Travel A Great Mix, CruisinMan, Metre Wishom, lbtravel, and of course olescorekeeper!