I'm So Excited!

Most Reps In YTB's Program To Be Demoted On June 1

As announced by Scott Tomer on the Official YTB Blog, all current Reps who are NOT power team leaders or higher will be demoted to an Associate on June 1 and no longer be allowed to discuss YTB's opportunity.

Everyone begins by registering as an Associate in YTB 2.0. They supply their PowerTeam Leader with a list of prospects who they believe would be interested in purchasing an Internet Travel Center or becoming an Associate. That’s the end of the Associate’s responsibilities! In YTB 2.0, PowerTeam Leaders help them by following up and closing the sale of an Internet Travel Center or registering an Associate.

That’s right! At YTB, we don’t allow Associates to explain our business to their friends and family. That’s not fair to them or their prospects. We believe a person who has been trained about our business is better equipped to answer the prospect’s questions and help them get off to a fast start.

And, for every prospect who purchases an Internet Travel Center from the PowerTeam Leader, YTB will send the Associate who furnished the name a $50 thank you. There’s no limit to the number of prospects an Associate can refer, and there is never a requirement for them to become a Rep. Anyone not qualified to override on June 1, 2009, is an Associate who must refer their prospects to their PowerTeam Leader.

Hmm, so much for the "copyrighted Bill of Rights"!

Irony At Its Best

In light of this, I find this photo amusing.

Travel Weekly Cartoon

This Travel Weekly cartoon got my vote! Did you cast yours?

The Rough Draft

UPDATE: Travelcop has informed me that many may not realize this is satire. I thought it was obvious; but apparently it fooled him. To be clear, this IS satire and not an official communique fro YTB.

Recently, TheFactsAboutYTB.com (not to be confused with TheFactsAboutYTB.net), was updated to include an "open letter" from Scott Tomer to the masses on the front page. As with any important correspondence, the final product likely went through several revisions. The following iteration seems like it might have been one of the previous drafts:

The flurry of negative articles surrounding YTB’s settlement with the California Attorney General is not a surprise to me. I have accepted the fact that our critics take great pride in authoring factual articles about our company. The only way anyone could claim “YTB barred from California,” as one headline read, is to completely read the terms of the settlement, which we are hoping you don’t.

Open-minded people with legitimate agendas designed to support their position or promote a competing business must think they will tear us down. Andy Cauthen, our President and COO, recently sent a letter to our home office staff and leaders of our sales force (but not our sales force or the RTAs because we don’t want them to know too much) addressing these less than honorable competitors.

He said, “Critics have a motive; no one criticizes just to criticize. They are paid something. It’s a self-indulgent motive. They are looking to protect an industry that they have spent years building that we are trying to rape, pillage and plunder.

“We hate their methods and strategies; they take all the facts and we don’t like it when they show that we are less than ethical. They actually enjoy it because slowly but surely, people are beginning to notice that they are right. We have lost a ton of RTAs and Reps and right now we can’t sell most cruise lines and we shouldn’t even discuss IATAN.”

So why don’t we respond directly to our critics? Andy answered, “Because they are right. We are in enough trouble as it is, and we certainly do not want to go on the record.”

He summed it up perfectly by quoting the old farmer’s saying, “When you wrestle with a bull, sometimes you get the horns.”

No one seems to care what you do or how you do it as long as you’re ethical, legal, and compete fairly. But as soon as your true operations are discovered, be prepared for the critics and naysayers to begin spewing the facts and truths about you.

For all those critics, skeptics and predictors of doom for YTB, we aren’t buying your story because we know who we are. Besides, we just put out an incentive to recruit some more people to pay us $50 a month.

We are office, factory and construction workers, educators and pastors. So we do play the God card a lot.

We are farmers, students, artists, mortgage brokers, Hall of Famers, military personnel, doctors, nurses, and yes, many of us are convicted felons—but that’s ok as long as they can recruit and have someone send in a $50 check each month.

We live in big cities and small towns all across America, but mostly in homes that are under threat of foreclosure, so we prey upon those people to send us the $50 a month and lead them to believe that YTB will save their home. We are neighbors, best friends, co-workers, parents, veterans, coaches and volunteers. Well, only one Coach, and he has God at his side.

We are involved in our schools, our communities and our churches—these have been proven to be fertile recruiting ground as long as you can portray that you are making a LOT of money. We may have different political views, but we agree that America is a great place to live, work and raise families—and we all adore Coach and appreciate the opportunity that he had to make $3 million dollars a year and we make $120.

We are dreamers in action. And gullible as hell. We don’t expect a hand-out, a bailout or someone to do it for us. We are motivated, self-starters who are investing in the Coach’s latest scheme in the hopes of providing a better future for our families. And whether you like it or not, we’re going to continue building our businesses with YTB in spite of you because we really could not care less about travel, and Coach wants more money.

Are we perfect? Hell no; but we will make sure that everyone that pays us $50 a month thinks we are. Have we made some mistakes? Mistakes is such a harsh word; we prefer to say that we made corrections. We recently emerged from a dark cloud of suspicion about our future when we settled the California Attorney General lawsuit—if you read the press release we sent out, stop there. Please don’t read the actual settlement because you may see that we cannot afford the fines, and well we just don’t know how the heck we can recruit in California when we have to tell people they will likely lose money. Maybe we can mention that really fast and quiet like at the end of the car commercials on television. While some have reported the end of YTB, we believe it is the beginning of the next phase—one that will continue to take money from people foolish enough to give it to us. We will continue to find free things to add to your “bizness” and hope that you don’t realize they add no value. We will continue to operate just under the law in all states until we are stopped.

Your disdain for us is abundantly clear, and you have proven you will keep reiterating facts that we must then try to cover up. You may not see our response to your criticisms in print or hear our voices in protest, but we are working hard to get as much money from the remaining RTAs that we have and are preparing to move on. As Andy Cauthen so aptly put it, “There’s never been a statue erected to a critic, but we did build a helluva nice one for the convention last year. And by the way, we thank you for allowing us to filter the money for that into our secret little company.”

Please Remember

The DSA Statement

It seems that the Direct Selling Association (DSA) will begin(finally) looking into potential violations of their Code of Ethics by YTB. If it is determined that they did violate the Code, YTB could be terminated. I am sure they will claim they don't need the DSA either. Isn't it strange that when an organization "endorses" them, they fly the flag; but when they don't, they are a sham--Royal Caribbean, IATAN, Perrillo, Qantas, A Plus Tours, NCL, and maybe soon the DSA?

According to the DSA release,

The Direct Selling Association (DSA), a national trade association, has issued the following statement in response to the final judgment and permanent injunction in the matter of The State of California v. YourTravelBiz.com, a subsidiary of DSA member company YTB International, Inc. (YTB):

The issues addressed in the judgment, injunction and accompanying statements made by California Attorney General Edmund Brown are serious in nature and require review by DSA with regard to possible violations of the DSA Code of Ethics.

The DSA Code of Ethics is the basis of a self-regulatory program designed by DSA to outline and enforce the use of ethical business practices by member companies of the association. Among its provisions, the Code prohibits unsubstantiated earnings claims and unfair or deceptive sales and recruiting practices. Additionally, while the judgment in this case did not identify YTB as such, the attorney general’s press release repeated that office’s original assertion that the company is pyramid scheme. Both the Code of Ethics and the law identify pyramid schemes as illegal and such operations are not permitted to be members of the Direct Selling Association. DSA’s Independent Code Administrator is currently reviewing the 23-page consent order to identify any violations of the Code not already addressed by the requirements of the judgment.

The DSA Code of Ethics provides a range of remedial options in the case of a Code violation, including expulsion from the membership.

More Truth Out Of California

While YTB is claiming "victory" in California, I believe it is anything but. YTB was in discussions for 18 months with California BEFORE they filed suit. One must assume that the discussions were not going well. Of course, YTB tried at the last minute to prevent the suit by announcing a "franchise" option which was most likely one of the discussion points in the previous 18 months. Regardless, California demanded some serious changes from YTB and YTB would not accommodate them, so they sued.

No, YTB is not out of business (yet), but their business in California, their number 1 state, is severely curtailed.

Here is a list of some changes (in no particular order) YTB has made or will make as a direct result of the California investigation, lawsuit, and ultimate settlement.

• Eliminated program where purchase of website (total of 4 and one could be your own) can make you eligible for additional Rep bonuses
• Eliminate program where successful Rep gets his/her own website fees refunded
• Required to give all Reps demonstration website that must be used to recruit (not their own website)
• Eliminated Certified RTA program where if Rep pays for certification, he/she gets paid for travel sold by his/her Power Team recruits
• Eliminate travel discounts from advertising as benefit of owning website
• Eliminate travel credentials
• Franchise regulation which requires disclosures, 14-day cooling period before sign-up, etc.
• Eliminated Two Fly Free program b/c violation of CA Travel Discount Program law
• Eliminate tax deductions from advertising
• Income disclosures required for website owners (with median numbers, not "averages")
• Income disclosures required for Reps (with median numbers)
• Cost disclosures
• Additional miscellaneous disclosures, including clear explanation of how commissions work
• YTB's ban of Rep websites/marketing materials (December 15th anyone)
  
• Clear and complete separation of marketing for the website and Rep opportunities, including presentations and marketing materials
• Make cancellation easier
• Limitations on Rep income
• Oversight and monitoring by AG's office

YTB's changes, even those made before the settlement would never have been made without the contact and/or demands from the Attorney General. The changes to YTB's business model, both in what they've done due to the investigation/lawsuit and what additionally they now have to do, will mean their business will have to stand on its own merits--travel. Or fail. In California.

An Act Of Desperation

Another play has been called. Recruiting must increase immediately. Don't worry about travel, just recruit. And to help you along, Coach is promoting you to the Power Team:

Just When We Thought It Couldn't Get Any Better...
THE NEW CHAPTER OF YTB

Coach just announced at Red Carpet that ALL RTA's that have personally sold 3 travel websites by May 31st will be promoted to Power Team Leader!

This just cut your qualifications in half !!!

If you already have 3, 4 or 5 travel websites sold you have just been promoted and the next personal sale will start your power team.

If you have 1 or 2 sold, when you sell the 3rd, you will be promoted and the next personal sale will start your power team.
Think about this for new RTA's :

• If you join YTB and sell 6 travel websites in your first 14 days in the business you will now earn $950.00**
• And then only 3 more travel store sales anywhere in your power team will net you $1,150.00** to $1,300.00** !
• We are talking about $2,250.00** for 9 travel store sales !

Let's help some people make some money !!!!!

MAKE SURE YOU'VE GOT THE POWER !

NOTE: If people are wondering about the May 31, 2009 date; in the Settlement of California, the trigger date for allowing full and complete disclosure of the costs of belonging and the full disclosure of earnings is June 1, 2009. Now of course this is a nationwide push for recruiting, but YTB has 10 more days to recruit in California "the old way" without being in contempt of court.

The Real Questions Lie Ahead

Over the years, people have asked why the traditional travel agents want to see YTB fail. It is not a very fair question. While I could never speak for anyone other than myself, I might suggest that most traditional agents are not seeking failure, but change. Most are not afraid of any competition (contrary to the belief of many in YTB) and in fact relish it. But the caveat would be fair, legitimate, and ethical competition. Well, in baseball they give you three strikes!

The past 18 months on this blog has certainly demonstrated the shortcomings of MLM in the travel business and in particular YTB.

There is no dispute that YTB has acted, at best, on the fringe--of ethics, fairness, legitimacy, and legality. If there was a loophole to be exploited, YTB would exploit it. Even Paul Henderson from ProTravel Network has said he will continue to exploit the weaknesses until stopped.

Well, last week, YTB was stopped in California and there is another battle looming with Illinois--a much more severe one. This suit levels stronger accusations, stronger penalties, is seeking a complete cessation of business and is in their home state!

Perhaps it is time for those that are in YTB or are supporters to take a break from bashing traditionalists on this blog and others and look to Wood River for some answers.

You joined a company and certain expectations were set--if they were true or false is irrelevant. The opinions of this blog, Travel Weekly, TravelPulse, Travel Trade, and Travel Agent are irrelevant. What you need to do is look at the facts, and ask yourself if these facts (most of which are negative) were preventable? Did management have the wherewithal to prevent the situations that you continuously find yourself defending?

This article is chock full of facts, links and sources. Do not take the spin from Wood River as Gospel. Do not take this blog as Gospel. Look at the facts yourself and look at them with an open mind and ask yourself if this is really such a good opportunity after all?

Instead of flinging insults, maybe it is time to begin to fling questions?

A TravelCop's Predictions (FAIL)

Back in April when YTB leaked the settlement to it's insiders, there was a rebuttal by the Attorney General that there indeed was no final settlement.

Our very own TravelCop opined on this site and expressed his infinite wisdom. Now the settlement has been released. Let's see how he did.

HERE! HERE! That is good verbiage! I agree! There are alot of TTA's mad at YTB wrongfully! We did not invent internet travel - we are just capitalizing on a marketshift. YTB will come out of this just like they did in Rhode Island - when Rhode Island got into court with us - they said WOW- look how the law is not even lawful!! Let's change this old law and let YTB resume business! WOW!! In CA - the JUDGE asked for mediation - the state of CA does not have the money to fight YTB- and YTB should not be wasting time or money on this monkey suit. YTB is not a pyramid scheme- we have products and services and vendors and suppliers and we get paid ALL THE TIME!
Average a paycheck- how fair is that when I am getting paid thousands and you lump me in with the fool who sits at home on the couch eating bon bons watching Oprah? you will lump my income in with the fool who waits for money to spew out of the computer! I wait for nothing- I work at my business and make it work and I get paid. Taking an average from an above average achiever and a below average slug is not right or fair and those numbers don't actually mean alot. Now- if you want to say that this person does their due diligence and is working the business and makes thousands- but this slug over here makes nothing because they don't work...FINE. But tell the truth. Averages mean nothing. It is just applying mediocrity to above average people and giving slugs a better look. No way!
As for not showing our pay checks to get people in - now THAT would be unethical...and believe me- if anyone who makes anything in YTB sent out copies of their checks and copies of their 1099 to ENTICE someone to get into the company - You bet that John and his cronies would be right there to criticize that too!
Don't feed into their vortex of shame!
Look at ALL the boards and blogs JOHN is on...
He evidently is not selling much travel if he has the time to be on all these boards!
YTB will not have to make changes to anything John- we have done nothing wrong!
- TravelCop (4/16/2009 8:52:10 AM)

How are those non-changes coming along?

Awww, They Like Us

May 14-18, 2009

Some Comments On Illinois Vs YTB

Contrary to what some of the commenters on this blog (and others) think, this lawsuit has a lot more teeth and is asking for fines that will dwarf what was asked for and received by California.

If found guilty, a verdict could cost YTB over half a billion dollars. If you read the filing, you need to note that there are two separate counts. The Illinois Attorney General, Lisa Madigan is charging that YTB violated the Consumer Fraud Act (Section 2A2) and also violated the act  a second time for unfair and deceptive acts or practices.

In each of these counts, the State is seeking fines of $50,000 per violation, legal fees, plus restitution. Now at the end of 2007, YTB reported that there were 5720 RTAs in Illinois.

So, if the AG is successful, YTB is facing $285 million per count, plus complete restitution of all costs to each RTA.  Do the math.

Is it realistic to expect that? Not at all, but as with any legal case, you fire the first shot high. I am sure Illinois will be happy with an injunction preventing YTB from operating and no money. Madigan is a tough cookie and some feel she is perhaps the toughest prosecutor in the US. Take a look at her accomplishments for 2007 alone. If I were YTB, I might be very worried. If I were any of those Directors that bailed last month, I would be breathing a sign of relief.

As I said before, I feel the case is laid out much more clearly in the Illinois filing and it really highlights the variance between those on the bottom of the pyramid and those on the top. The St. Louis Post Dispatch has a good analysis of the suit, and they agree, that it does not look good for YTB--contrary to the hundreds of comments from the YTB faithful who claim that this is all good news!

And to be honest, with all this court time, I am not sure when YTB will find the time to sell travel or recruit. Class actions, former Director suits, suing former directors, the little issue Coach has about River House, and I am sure a repeat appearance in Los Angeles for contempt (just a prediction).

Illinois Complaint

Here is a copy of the Illinois Complaint against YTB.

Wow, The Ink Barely Dried

Illinois has filed suit and is seeking to have YTB cease operations in Illinois.

Wood River, Il. (KMOX News) -- Illinois is the latest state to go after an on-line travel business accused of operating a pyramid scheme.

On the same day the state of California announces a court judgement against Your Travel Biz.com, the Illinois Attorney General files suit. That lawsuit accuses the Wood River company of misleading consumers about how much they can earn if they purchase their own travel website.

Attorney General Spokesperson Natalie Bauer says investors complained the only way they made money was by encouraging other people to purchase websites.

Bauer says the Attorney General is asking the court to stop YTB from doing business in Illinois and is also seeking restitution and penalties of tens of thousands of dollars.

As KMOX reported previously, in California the company has been ordered to pay a million dollars in penalties and restitution, and substantially change it's marketing and business model.

Comments On "The Settlement"

Well, to be honest, I thought the financial aspect of the settlement would have been higher, however, upon review, it seems that YTB has essentially been put out of business in their top producing state. Not quite the slam dunk Coach thought. And I am not sure I see too much egg on Jerry Brown's face. Anyway you look at it, this is a loser for YTB.

The $1 million dollar fine and penalty is payable in 4 equal payments with the last being due on December 30, 2009. With declining TSO enrollment, a missing $500K from a bum real estate deal, a $1.3 million dollar increase in a credit card escrow account, and only $1.8 million of cash and equivalents, it will be difficult to pull off.

Speaking with Scott Gerber of the Attorney General's office, he indicated that this was a very restrictive settlement and California has every intention of making sure it is honored. It is important to note that the settlement not only covers YTB but their independent contractors as well. When asked about the wanton remarks by the Reps and RTAs on Craigslist and other sites, Gerber said, "If there is one instance, there is probably no action. But if we see a pattern or multiple instances, we will return to the court and seek a contempt order and ask for more stringent enforcement." So, it seems that YTB had better begin recruiting mutes if they stand a chance of compliance.

The terms of the settlement essentially are putting YTB out of the California market. From here on, YTB must

• Register as a franchise and offer the franchise at no cost to existing TSOs
• TSOs shall not be required to be a Rep
• TSOs shall not be allowed to promote the Rep opportunity unless they are a Rep as well
• YTB will not be allowed to discuss the Rep opportunity and the TSO opportunity in the same meeting or marketing materials
• Reps cannot be incented to become a TSO
• YTB is no longer allowed to charge Reps for anything--training, entrance to meetings, etc.
• Reps are not allowed to demonstrate on their site (if they have one); but must use a new demo site only.
• The Bill of Rights has been tossed and the compensation plan rewritten.
• YTB is not allowed to make any changes to uplines or downlines
• YTB must disclose on their sites (12 point font) and at all meetings

The number of TSOs who have not received any compensation in the last quarter and year

The median compensation of TSOs for the last quarter and year

Typical costs incurred to be a TSO including sites, presentations, marketing materials, events, etc.

The number and percentage of TSOs that dropped in the last quarter and year

• Similar disclosures are required for Reps
• They cannot state that a TSO can apply for travel credentials until they are reinstated by IATAN
• YTB cannot advertise or promote travel discounts
• YTB cannot state or imply that a TSO may make tax deductions; but must say there may be deductions available and to consult an accountant.
• YTB cannot state that their rates are comparable to any online booking source unless they disclose that they are not necessarily the same or cheaper as those sources.
• YTB must give the AG unfettered access to their books and marketing info
• YTB must give the AG unfettered access to any and all meetings, opportunity events, etc.
• YTB must report quarterly, a littany of information regaring the TSOs and Reps in terms of numbers enrolled, dropped, and monies earned.
• YTB must provide quarterly, copies of all marketing materials and agreements between TSOs, Reps and YTB
• The AG can disclose or not disclose his presence at any meeting to YTB and YTB is not allowed to disclose his presence under any circumstances.
• Oh, and $1 million in fines and penalties

There are plenty of other terms and conditions, but these are the big ones and likely will cause yet another large exodus of Directors and Reps from California. All of a sudden YTB does not look like a good opportunity when you have to disclose that the average annualy commission is less than $100. I am not sure anyone can sell that opportunity--especially when you are not able to let them know you can make another $120 a year as a Rep.

Since YTB has already shown that they are unable to control the message of their Reps in the field, I wonder how they will handle this. The Attorney General will still need the eyes and ears of California residents and legitimate travel professionals to help them monitor the compliance (or non) of this order. To be honest, the only way I see YTB being able to control the California Reps and Directors is to terminate them and cease business in California--and after all, isn;t that what Jerry Brown wanted all along?

It is funny, I recall so many of the YTB faithful saying that California was going to be thrown out. That YTB was going to show Jerry Brown they are right. Well, if this is how YTB shows people they are right, let me get in line, I can use a million bucks. And to the folks that thought we did not know anything, I guess you were incorrect. Where was the settlement posted first? I bet that the majority of YTB doesn't even know about it from their own company! There will be more commentary in the days to come including some from a MLM expert on what the future may hold!

Any guesses on how much longer till Lisa Madigan send out a memo?

PS-No blog post tomorrow, this will have to do.

The Settlement Is Official

Here is the YTB Settlement. More comments when reading is complete!

Here is the press release:

Los Angeles – Bringing an end to an “elaborate pyramid scheme,” Attorney General Edmund G. Brown Jr. today completed an agreement forcing YTB International to stop the deceptive marketing of its largely unprofitable travel websites and prohibiting the company from charging consumers nearly $500 to recruit others into its endless chain scheme.

“YTB falsely promised customers they could get rich quick by selling travel online,” Brown said. “In reality, customers were reeled into an elaborate pyramid scheme and most never earned a dime. Today’s settlement ends YTB’s pyramid scheme by arming consumers with hard facts and eliminating the need to sign up for this largely unprofitable website.”

On August 7, 2008, Brown filed suit against YTB (also known as yourtravelbiz.com), its affiliates, and founders to end the pyramid scheme and stop YTB’s false and misleading marketing campaign. Today’s stipulated judgment, filed with the Los Angeles County Superior Court, accomplishes this by:

• Prohibiting false and deceptive marketing;
• Requiring that YTB provide consumers with information in a clear and conspicuous manner about how difficult it is to make money by selling travel through YTB;
• Prohibiting the company from charging nearly $500 to recruit others into the scheme and requiring that new member recruitment be done using a free online demonstration;
• Limiting income from “downstream sellers” (e.g., people who have been recruited and who have become recruiters themselves);
• Eliminating perks and other incentives for joining; and
• Making it easier to quit.

YTB lured consumers into its travel business with false promises of wealth and deceptive marketing. YTB charged customers $449.95 for the purchase of a website, and $49.95 a month to operate it. In total, consumers paid YTB over $1,000 in the first year of operation.

Many signed up to sell travel or to obtain travel discounts, but they quickly found it virtually impossible to make money selling travel. A plane ticket from Los Angeles to New York, for instance, would only yield $3 in profit. An international ticket from San Francisco to London would net only $6 in profit.

In 2007, the annual median income for those selling travel was $39.00, less than one month’s cost to operate the website. The majority of consumers who purchased YTB websites made no money through the sale of travel, and many lost money through continued website operations.

By contrast, recruiting others to purchase websites, and having those purchasers recruit others to purchase websites (and so on), was much more profitable. Members earned money based on how many websites they sold, as well as how many websites those they recruited sold. These multi-level sales, combined with the required purchase of the $449.95 website, formed the foundation of YTB’s pyramid scheme.

The stipulated judgment ends this pyramid scheme by:

• Prohibiting false and misleading marketing and requiring that consumers be provided with information about how difficult it is to make money through YTB. Until now, YTB has made wildly misleading claims about how much people can earn from selling travel. This included videos of YTB agents driving luxury cars and holding up $10,000 checks, and making misleading statements about millions of dollars earned in commissions. The stipulated judgment requires YTB to provide consumers with information in a clear and conspicuous manner about typical income earned by website purchasers, typical cost of operations, the number of people who quit, and the number of people who have not earned commissions. This allows consumers to see that most YTB travel sellers make no money, and in fact rack up high costs.

• Prohibiting YTB from charging consumers money in order to recruit others. Until now, the only way that consumers could demonstrate the website is if they had already purchased one for $449.95. The stipulated judgment requires YTB to establish a free demonstration website that must be used when recruiting others. This will reduce the incentives for people to purchase YTB websites, which are largely unprofitable when used to sell travel.

• Significantly limiting how much people can make from individuals they have recruited and who have become recruiters themselves. Sixty percent of recruiters’ sales must come from persons who are not themselves recruiters; otherwise, their income will be reduced.

• Prohibiting YTB from:
• Issuing travel credentials in California and advertising that travel discounts, perks and tax-write offs are available by purchasing a website.
• Stating or implying that their travel rates are comparable with those of travel booking sites such as Expedia or Orbitz.
• Providing any recruitment bonuses or compensation based on the recruiter’s purchase of a website.

• Requiring YTB to open up its operations to scrutiny by the Attorney General’s Office. The Attorney General’s Office will have access to all YTB marketing materials, events, meetings, gatherings and presentations to ensure the company is complying with the agreement and California law. YTB will also register as a franchise with the California Department of Corporations as required by law.

• Requiring YTB to make quitting easily available by fax, email, or telephone.

• Requiring YTB to pay $1 million in penalties, costs, and restitution to California victims who filed complaints against YTB.

In filings with the SEC since Brown’s 2008 lawsuit, YTB stated that there is “substantial doubt about the Company’s ability to continue as a going concern.” Also, it revealed that in 2008 and the first quarter of 2009, YTB has lost $5.9 million from its operations. The number of internet websites sold decreased 75% in first quarter 2009 compared to first quarter 2008, and the total number of website owners decreased 53% in first quarter 2009 compared to first quarter 2008.

Today's settlement builds on the Attorney General's ongoing commitment to protect Californians from the get-rich-quick schemes that proliferate in a down economy. In March, Brown entered into a settlement enforcing tough restrictions on two companies - Imergent, Inc. and Stores On Line - that falsely promised customers that they could earn full-time income by selling merchandise over the Internet.

Story Time With A Former RTA

Once upon a time.....

Angelo LoPresti is a former RTA based in Florida. When he first heard about YTB, he signed up for his love of travel and the opportunity to make a few bucks selling it. Secondly was to save a little money on his own travel. There was never an interest in recruiting the downline. After all, he signed up with YTB because they were a "travel company".

I do not mind my name in the media. You can use it. My reasons for leaving YTB are probably the same as the other thousands have been. I am tired of MLM running the business.

I got into YTB because I wanted to sell travel, part time. I love travel and in my private life have helped many friends plan trips. I am an avid Disney Fan, having been up to Orlando hundreds of times. So with all of this knowledge I assumed I could help people plan trips and travel and get paid for it. So it was natural for me to get into travel and YTB was the first company I looked at.

And I am doing this part time, I know for me to replace my day job (Art Director for a local magazine here in West Palm Beach) I would have to be a top producer. Will this ever happen? I do not know, maybe in the future.

Yes I drank the Kool-aid and got hooked. What is funny/sad about this is a couple of weeks after we signed up and began this business, my wife thought it was a scam and wanted nothing to do with it. But I persisted for two more years.

What really did it for me, what was the straw that broke the camels back was loosing NCL. I should have left after YTB lost RCL, but didn’t and I do not know why. And lets not talk about not being able to use www.bookccl.com. I thought YTB was Carnivals golden child, oh how times change. I just didn’t want to quit. I wanted to make it work. After you invest so much time and money into something you do not just want to walk away, you want it to work. But there comes a time when enough is enough.

I feel for the people who just want to sell travel at home and are in YTB. Because YTB is not a travel company, it is a MLM. And YTB does not give out the best commission split, I am getting 10% more now with my new company, and with NO monthly fees.

Plus we all see the writing on the wall. YTB will settle with the California AG, and have to pay a hefty fine. And this will open the doors for other states to come after them to levy a fine on YTB also. With all of these fines, the stock worth close to nothing, and travel sales going down it is only a matter of time before YTB either has to make a significant change or they close their doors.

I am with outsideagents.com now and they are a much more professional company. They are all about travel. No fee’s, no BS, no recruitment, no bonuses, just simply selling travel. And that’s it basically. I do not, nor have I ever wanted to recruit anyone into this business. I want to make a few bucks sending people to Disney World and on Cruises. Having them email me at the end of their trip telling me how happy they were.

And before you go all nuts, I asked him specifically if I could use his name and he agreed!

USA Today Warns About MLM Firms

On May 8, 2009, USA Today had a piece entitled Strategies: Is multi-level marketing a good choice for you? The easy answer is "NO!"--which the stated. Here are some excerpts:

What you'll get is a pitch for a type of business referred to as multi-level marketing (MLM) – although it may be called by other names, including network, direct, affiliate, or matrix marketing. (Because these schemes get such a bad reputation, the companies change names to make them more attractive.)

Should you try it? After all, you may not have a lot of other choices, especially if you're out of work. And your friend is very persuasive. They tell you how much they love the products or services they sell, how supportive the people in the program are, that they've made thousands of dollars.

As with any business opportunity, before investing your time and money in a multi-level marketing program, do your homework. Ask to speak to participants who do not recruit any others and who sell only to non-program customers. Ask for the average and medium income, not just a few examples. And ask how much money the average person makes in comparison to the total they spend on any and all products and services related to the program (including training). If they told you the truth, you'll find it's just about break-even at best.

Certainly a paper such as USA Today can't be wrong?

Travel Weekly Chimes In

Travel Weekly...the Holy Grail of the travel industry...the publication mentioned by name numerous times in the YTB 10-Q filing...the source for fair and balance information about YTB...the firm that verified that YTB did not smoke their numbers when they reported them to be #26 on the Power List....has come forth with the following headline:

YTB warns that it may not survive

Travel Weekly points out several of the points we made this morning including

Net revenue in the first quarter came to $21.8 million, and 85.4% of revenue came from selling websites to prospective travel sellers and from the monthly fees that these agents pay. Travel commissions and services accounted for only 11.6% of revenue. Another 2.2% came from sales of training and marketing materials to those who purchased websites.

In the first quarter, YTB lost 20% of its travel sellers, which YTB formerly called referring travel agents (RTAs) but now calls travel site owners (TSOs). It started the year with 92,383 and ended the quarter with 73,801. In the first quarter of 2008, YTB was still gaining in numbers of website owners — from 131,802 to 138,525.

A Quarter In Review

According to the 10-Q filed yesterday, here is what was disclosed:

• In looking quarter over quarter, recruiting income is down 45% and travel income is down 52%
• They realized a net loss of $1.9 million dollars in three months
• However it was better than last year. In 2008, they managed to lose $3.5 million in three months back then
• They have nearly $1.3 million in receivables. Most travel companies have next to nothing
• The jet was bought for $1.3 million and sold for $872 thousand
• They are down to 73, 801 RTAs/TSOs
• They were at 92,383 just three months ago
• The new Co-CEO is a consultant
• They are trying to raise additional capital by offering a TSO Stock Purchase Plan
• They are planning on selling more assets to raise capital
• They have a lot of court time in the coming weeks
• June 1 is the date to see if the Class Action Suit for $100 million will be dismissed
• No one has signed off on any settlement in California yet
• Their insurer agreed to pay only if California was settled (hmm interesting)
• They used to have a $1.7 million reserve for credit card processing. Their processor raised it to $3 million
• With only $1.8 million in cash and cash equivalents, they plan to fund that $3 million by June 30th
• The people that bought their property stiffed them and didn't pay, so now they need to foreclose
• There is almost $400 thousand dollars worth of YTB clothing. Any lime green?
• On April 1st they were sued again for violation of an oral contract
• On May 7th, they sued some of the Directors who left the company and will be in court May 14th
• On May 8th, they filed suit for the money the departed Directors borrowed and never paid back
• They are really not too sure that they can win any of these cases
• Contrary to Travelcop's delusions, Clay Winfield did indeed resign on April 30th
• They anticipate future travel revenue to decline
• Recruiting accounted for 85.4% of thier income
• Travel accounted for 11.6% of thier income
• They sold an average of 618 new IBCs per week
• 2,167 called it quits per week
• For the conceptually challenged, that is 1 quitting RTA every 5 minutes (if anyone can find a widget, that might be a fun one to have on the blog)
• It cost them almost $300,000 to defend against California for the first three months of the year
• They ran out of money (and hope it seems) to build the headquarters. In the old K-Mart, Aisle 19 was saved
• Oh, and Canada--not so much
  

Discussion?

YTB Loses 1.9 MIllion In 3 Months

The 10Q was filed this afternoon.

YTB Needs YouTube Help

This was sent last week from Director Karen Bomm. I only wish you could see the full and colorful original formatting, but it was sent via email!

How can you HELP YOURSELF &YTB?
Director Karen Bomm

Were you wondering WHY YTB has put some YOU TUBE Video's

on our Travel & Marketing Websites?

Did you know if you have an computer or several computers & YOU FULLY RUN the

YOU TUBE Video's on your YTB Travel Website & your YTB Marketing Website

ONCE A WEEK...YOU HELP YOURSELF & YTB?

YOU may be asking "WHY"? or "HOW" does this help ME & YTB?

The MORE these POSITIVE YOU TUBE VIDEO's about YTB are played COMPLETELY, the further up the internet charts YTB gets with these POSITIVE YTB VIDEO's instead of all that *&^%$#@ (other stuff) on the internet about YTB.

How can YOU HELP YOURSELF & YTB?

By taking time out ONCE A WEEK on your office computer, friends computer, laptop, MOM's computer...watch 1 of the YOU TUBE Presentations displayed on your YTB Travel Website & 1 YOU TUBE VIDEO on your YTB Marketing Website COMPLETELY on a DIFFERENT COMPUTER.

Clearification or REQUIREMENTS to HELP YOURSELF & YTB:

WATCH THE YOU TUBE VIDEO'S COMPLETELY;

CHOSE the POSITIVE YOU TUBE VIDEO's on YTB (even if you are curious...play ONLY the VIDEO's you know are POSITIVE ABOUT YTB or you will be supporting the DARKNESS CHASING YTB's Business & your RTA's);

WATCH the YOU TUBE VIDEO's ON DIFFERENT COMPUTERS ONCE A WEEK TO HAVE IT COUNT(your IP Address is documented when watching the YOU TUBE Video's, therefore, don't waste your time repeating this daily on the same computer...ONLY WEEKLY is required! If you would like, change computers daily when WATCH EACH YOU TUBE VIDEO COMPLETELY...i.e. @ a prospects office computer & share this with your TEAM to watch it once a week also).

PASS this ONTO YOUR TEAM! Thank you for all that you do in supporting our future with YTB

Another Day, Another Director

UPDATE: I received an email from Tessa Graham and it appears that the email forwarded to me (below) was indeed edited. I have made the corrections below, and include Tessa's response here:

Hello John,
I appreciate you veryfying if something was added to my email. Please remove the last sentence "we've escaped the cult". I did not give a permission to ad to my letter. I love this company! I am sad that I left it. It was a business decision from our part. Please remove the cult part. This can ruin people! It is not fare. This message is meant to be a beautiful and graceful exit.
Thank you so much.
Tessie graham

An email recently distributed by Frank & Tessa Graham upon their resignation as Directors with YTB!

Dear YTB'ers,

For the past three and a half years, YTB has been the greatest memory in our lifetime. During this period we have made many great friends and had built meaningful relationships with successful leaders in the company. We will cherish these memories forever.

Frank and I have decided to resign from YTB to pursue other business opportunities.
I would like to extend our gratitude to all of you for giving us the opportunity to serve and mentor you. We would like to also thank you for supporting all of our Super Saturdays and Certification Classes we hosted all over the country. We had a fabulous time teaching!
Frank and I would love nothing more than to keep and preserve our friendship with you for years to come.

If you have any questions or need help concerning your YTB business, please call your upline leader or call YTB at 1-800-243-4450 to assist you.

All the best to all of you, and "Thanks for the memories".

Frank & Tessie Graham
Frank and Tessa
Former YTB DIRECTORS
We escaped the YTB CULT !!!!

Aeromexico Loves Agents

I know there is H1N1 and all that but wow, a fantastic perk!

Aeromexico discounts fares for agents’ personal travel

Aeromexico launched Amigos Fares, deeply discounted fares that can be used only by IATAN-registered travel agents in the U.S. and Canada.

The airline said Amigos Fares offer a 90% discount on unrestricted economy fares for nonstop flights to Mexico and a 75% discount on connecting flights. Companion fares are discounted 85% on nonstop flights and 75% on connecting flights.

Taxes, fuel surcharges and ticketing fees are not included. Travel must be completed by Dec. 10.

Aeromexico also launched a new website for agents, www.aeromexicotrade.com. The site has information about agent services, group travel, traveler services, travel guides and airline products. Travel packages are featured in promotional boxes on the site's home page.

In addition, the airline introduced the Agency Central newsletter, a bimonthly publication featuring offers for selling Aeromexico flights; rates for travel agent trips, including Amigo Fares; commissionable hotel offers; and policy changes. Travel agents can sign up at www.aeromexicotrade.com.

Hey YTB....how's that whole IATA misunderstanding coming along?

I Wonder If Expedia Is Pissed

When YTB says they are not competing against travel agents but against the Expedias of the world, I guess they are right.

Directors Edison and Lorraine Denizard have taken Expedia head on! Please visit  www.1800xpedia.com and see where you end up!

I wonder if Expedia is as protective of their brand as Disney? I mean if Barry "Dillar" paid $5 billion for Expedia and the Denizards are encroaching on it for $49.95 a month, I would be pissed!

10,000 Millionaires?

Well, if Coach wants to make 10,000 millionaires, he better get on the move. It seems that last year, he and his son Scott were the big winners in YTB along with Kim Sorensen.

According to an article in the St. Louis Business Journal,

Founder and Chairman Lloyd “Coach” Tomer made $2.98 million in total compensation in 2008, down from $3.3 million in 2007, according to the filing. Chief Executive Scott Tomer made $1.02 million in 2008, down from $1.99 million in 2007. Co-founder Kim Sorenson made $1 million, down from $1.99 million in 2007.

The article also stated that the Board member who abruptly quit on April 30th, was also the contractor responsible for building their new headquarters. I wonder what impact this will have?

Winfield is owner of Winfield Cos., an Edwardsville, Ill.-based luxury homebuilder that’s building YTB’s new headquarters.

To the RTAs and the Reps?  Are you making that kind of money in YTB?

More Pleasantry

On April 22, 2009, Coach called a play and decided to have a Pleasant Holidays Sale-A-Thon. He put  the call out to his crackerjack sales force expecting to show the world just how serious YTB was about selling travel!

Well, as of 2pm (EST) on May 1, 2009 (almost a full ten days) it appears that Coach blundered the play.

Total YTB sales under deposit (or paid in full) between April 22, 2009 and May 1, 2009 are 16 packages with a total of 39 passengers, 14 of those include air and 2 are land only.  Seems like 16 lucky RTAs are headed to Hawaii. But hey, it's ok because you can deduct it from your taxes!

What Does Clay Winfield Know

Does Clay Winfield know something? Clay Winfield, a longtime member of YTB's Board of Directors and a deeply embedded insider, abruptly resigned yesterday.


This now leaves YTB with 3 vacancies on their 11 member Board.

But another vacancy will appear next month when Dr. Timothy Kaiser (another deeply embedded insider) has also indicated that he will not stand for reappointment after the Annual Meeting coming up next month bringing the number of vacancies up to 4.

But fear not, with Tomer, Tomer, Sorensen, and Brock, the Board is still effectively deadlocked (insiders versus independents) for the month, and once Kaiser flies the coop, the control of the Board will once again return firmly to the hands of Tomer, Tomer, Sorensen, and Brock.



It seems that not only are the SALES Directors fleeing, but the CORPORATE ones are as well.