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YTB Faces Charges in Federal CourtAugust 11, 2008 By: George Dooley
The problems of Wood River, IL-based YourTravelBiz.com (YTB) multiplied following last week’s legal action by the California Attorney General after a class action law suit was filed in a federal court in Illinois and a regional Better Business Bureau (BBB) released complaints about YTB.
The federal action was filed in the U.S. District Court for Southern Illinois, according to a report by The Telegraph, a major regional newspaper. The action charges that YTB was an illegal pyramid scheme.
The action names two specific plaintiffs, Faye Morris of St. Louis and Kwame Thompson of Atlanta. The action seeks class action status on behalf of as many as 1,000 people who were members of the YTB travel network.
As with the California suit, the defendants are YTB International Inc., YourTravelBiz.Com, YTB Travel Network Inc., YTB Travel Network of Illinois and its technology unit Rezconnect Technologies.
Officers of YTB are also named in the action including founder J. Lloyd Tomer and YTB executives J. Scott Tomer, J. Kim Sorensen, Andrew Cauthen and Michael Brent.
Compounding YTB’s problems, a report filed by the Better Business Bureau of Eastern Missouri and Southern Illinois was released. The BBB alleges that YTB has faced consumer complaints filed in at least 31 states.
The new Illinois federal action alleges that YTB violated Illinois law by using an illegal pyramid sales scheme and illegal chain of referral sales techniques that caused the plaintiffs to suffer actual damages, according to the Telegraph.
Reports of the action by California’s Attorney General sparked angry debate among travel agents across the U.S., including defenders of YTB’s program and critics of YTB. Many agents assert that YTB’s program encourages non-professional "pseudo" agents to enter the industry.
The St. Louis Post Dispatch, a major daily, reported that YTB had responded to the BBB’s complaints via a statement by Chief Executive Officer Scott Toner, who said they were “unaware” of any unresolved BBB complaints.
“We are proud of our business model and how our operations are conducted in an ethical and transparent way,” Toner is quoted as saying. “We also are wholly confident that our business model will withstand scrutiny, and look forward to setting the record straight in court.”
At presstime YTB’ had yet to respond to the crisis on its website nor responded to emailed requests for comments.