California Attorney General Complaint Reveals YTB Economics
- Aug 06, 2008
- By: George Dooley
- TravelAgentCentral
The California Attorney General’s complaint against YourTravelBiz.com (YTB), recently filed in Los Angeles, offers insight into YTB’s operations and finances. The Attorney General alleges that YTB sought to “entice consumers to participate in their scheme ... Defendants make untrue or misleading claims that consumers can become millionaires and receive special travel discounts offered only to professional travel agents.” If proven, YTB could face $25 million in restitution and penalties.
Key points from the Attorney General's complaint, include:
“In 2007, consumers paid over $103 million to Defendants for websites, but made only $13 million in travel commissions in a business Defendants advertised as the 'easiest way to make money' and earn 'serious income' without any selling," the complaint says. "Of the more than 200,000 consumers who purchased or maintained Defendants’ websites during 2007, 62 percent failed to earn a single travel commission—not even on their own personal travel. The typical participant made no money on the sale of travel.
“Furthermore, the typical annual travel commission earned was less than the cost of just one month for a consumer to maintain his or her website," the complaint alleges. "Even among those California residents who participated in Defendants’ program for at least one year from April 1, 2006 to March 31, 2007, and who paid Defendants at least $1,000, 45 percent did not sell any travel and 61 percent made less income on the sale of travel than the cost of one month’s use of their website.
“While the vast majority of consumers made nothing selling travel, Defendants generated 73 percent of their net revenue of over $141 million dollars from the sale of websites and monthly fees," the complaint says. "Another 10 percent was generated through the sale to consumers of training and marketing materials. Only 14.5 percent of Defendants’ net revenue were generated from the sale of travel. In short, Defendants sell an illegal pyramid scheme that uses the minor, incidental sale of travel as a front for their scheme.”
The state said that the “attrition rate of participants is extraordinarily high and, as with all pyramid schemes, the advertised growth is unsustainable.”
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Comments 1-10 of 27
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Bob (SEPTEMBER 02, 2008)
Hello, I want to make a comment on YTB. I am a Certified Reffering Travel Agent with YTB and a CLIA Certified Cruise Agent also. It makes me sick with all you people that do nothing with your life except ask for FREEBEES from who or what you can scam someone out of money. Quit your crying, get moving in life or move out of the USA. You are the kind of negative people the USA does not need here. This is why we are going down hill with all the complaints in the USA instead. Too many people want it all given to them. YOU are lazy people. Yes there are some jerks in YTB and try to sell you the moon. But these people were con artist and jerks before they joined YTB. YTB IS NOT THE PROBLEM. The company executives and the good people give you every chance to succeed and tons of good help. All you need to do is ask for help and get to work. Travel is a lot of fun. We work at our own pace. We have made our investment back already.YTB
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Dee (AUGUST 28, 2008)
YTB Sucks!!! They are a bunch of scam artists. You dont make any money unless you have people sign up under you.. what kind of travel agency is that?!! they dont book travel because they are so worried about signing people up
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Angels in Colorado (AUGUST 19, 2008)
Those of you who have decided to go against YTB I will pray for.
I find it hard to believe that YTB will be found guilty. It's funny how these issues only come up in California. No one else is having these issues. I would totally be embarrased if I was in your shoes. Sounds like someone just wants a free ride on YTB. Unbelievable. Remember the Lord watches those who defy.
YTB and their Seniors have shown nothing but the utmost integraty, honesty, and compassion of anyone I have ever met.
It really makes me sad, that someone has decided to try and ride free on YTB. Thank God that won't happen.
YTB is the best thing that has ever happen in our life. We've been with YTB for 3.5 months and very happy with our success; hitting bonuses already.
Nothing comes free folks.
God I pray for those you have chosen to lie.
God Bless -
Devrow Gates (AUGUST 19, 2008)
I have no complaints about YTB. My husband and joined about 2 years ago. We are selling travel and travel stores. We are making money and have long ago made the money back that we invested into the business. The people who are complaining about our company, I am sure, have not put any effort into their business. YTB has been a blessing for me an my family. I encourage others to stop looking for the fault in YTB, join, work your business, and you will see for yourself that YTB does exactly what it says it will.
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Del (AUGUST 19, 2008)
I feel so sorry for those people that really want to learn the travel business.
Tbey get suckered in by YTB who promises the world. Unless you have a lot of friends and family that travel, and sell a lot of websites for them, you're not going to make it with TYB or any of these
[yramid schemes. If you're serious, and don't mind working, go to a local travel agency and see what you can work out. I did that in the beginning, and eventually
opened several of my own agencies. And, I trained all my agents for nothing. Some
ended up being managers in other agencies.
Made me proud. -
Paul (AUGUST 19, 2008)
I've booked cruises, other travel for family/friend groups for 35 years. Now I get paid for it. I booked 3 cabins on a one-week Carnival cruise; more than paid for my ytb signup.
I laugh at complaints about ytb being a scam. After my last group with a brick and mortar agency (BMA, I had to sue the BMA and the cruise line for double-billing me. Got my refund finally, but there are many similar nightmares.
ytb and its many vendors offer extensive training opportunities. If ytb agents don't take advantage of them, they have only themselves to blame. But the ytb model competes primarily with O, Ex, Tr, not with BMA. So ytb goes after on-line bookings that don't offer agent assistance.
BMAs do not guarantee competence. My lawsuit booking was with a well-known owner with many years experience. Despite requesting a line with a "good kids program" I got the line with the worst one (Captain's wife apologized for it).
ytb works if you book travel. If not don't sign up. -
Shelly Summers (AUGUST 18, 2008)
So the Davidoffs are encouraging YTB to sign up new members to their Merchandise travel scheme. When the Davidoffs owned their agency in Maryland they also signed up outside agents. They charged big bucks to work for them, did not bother to train them and then sent e mails to their clients and tried to encourage them to use their agency instead of the outside agents. Now because they are no longer selling from an agency but giving seminars and living in Florida they have changed their tune. YTB is great. Give me a break. I met many agents who felt taken by this couple. I recently also was approached by one of the YTB sellers. She said she was not joining or encourageing others to join to help with travel selling. She was just doing it for the free fams and the IATAN card which is not a real card. She then asked me what a FAM stood for. She didnt know the meaning. You can become a travel agent without joining YTB. Many agencies will let you work with them and train you without a fee.
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Turandot (AUGUST 15, 2008)
First of all...if you do not know anything about Travel ie:what GDS system you use, You don't have a legit IATAN card with your own personal reference code,you do not have any training on the Vendors products such as their policies, or why one would need Trip insurance, etc. etc.. I could go on...then you are not a Travel Agent.
Case and Point..a friend who joined YTB..who only joined to sell Travel had to call me and asked why Disney would not refund her friends Cruise Package...Well if she knew Disney's policy then she would not have to ask a Legit Travel Agent who knows the Cancellation/Change/Etc.. policies.
I could go on and on but I won't!
YTB or any MLM Travel company puts a sour taste in my mouth because I was reamed back in the early 90s. I joined World Class Travel/Network. Boy was I stupid! THE FTC closed them donw big time and I never got my commissions. People if you want to sell travel do it the right way. Go to school, or get trained/experience by working or intern -
Jonathan (AUGUST 14, 2008)
Letter to Kenneth.
"Why should they waste their time going to a travel agent when they can book their travel on line in their home or office" I agree, but sometimes people prefer to leave the research for tailor made itineraries to someone else. Why should they waste their time doing it themselves?
"YTB has one of the best on line travel start up business on line" how much research did you do for that statement?
"If I was a Travel agent sitting in a store front all by my self I would be getting worried on how I was going to make a living next year" Most Travel agents have moved their business to their home without the help of YTB. YTB are not the only way to do it. -
Daisy (AUGUST 12, 2008)
I'm sorry but I work on the other end of the travel industry. I assist YTB agents with reserving different vacations. And I'm sorry, but YTB has the most unprofessional so called "travel agents" in the business. With the money that you people pay, YTB should offer you some kind of minimal training. I never mind assisting anyone, but the problem is the unprofessionalism of these agents. They need to realize that they are conducting business with big professional corp. At least while conducting business, BE PROFESSIONAL! They talk in slang, most of them in there crass with music blasting, always 10 friends in the background screaming and yelling, and then on top of all of those annoyances, it's extremely difficult to deal with people in the world with "NO COMMON SENSE!". Come on set standards for your agents. It will only help YTB.
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