YTB California Lawsuit
Competition is always good for the market place and the end consumer always Wins when companies compete.
However there comes a time when you feel sorry for even your biggest competitor and that day is today for me regarding the California YTB Lawsuit.
Just as I was a manager for Wells Fargo Bank I taught and trained people how to help homeowners refinance thier loans over to Wells Fargo from Countrywide, Morgan Chase, City Group, and other lenders to make Wells #1. I could only feel sadness for all of the employees that lost thier jobs when the market began to go down. Even though the Wells portforlio and business model had done better than other banks through this real estate storm you want to see these other financial institutions continue.
Thats how I feel about YTB California Lawsuit today many friends and family members I know over there that are stressed out and looking for secure income are effected by this news.
Our CEO has asked us to be respectful as we come in contact with others about this sensitive issue which is the kind of Class I expect from all of our Traverus Family. Let's all go into prayer for all of the thousands of people This will Effect.
California is the 2nd Largest state for YTB so this is very alarming to many.
YTB sued by California attorney general
WOOD RIVER - One of the city's largest employers and seller of online travel is being sued for $25 million by the California Attorney General's Office for operating a "gigantic pyramid scheme."
Attorney General Edmund G. Brown Jr. announced Tuesday that he filed suit against YourTravelBiz.com, a subsidiary of YTB International Inc., for recruiting tens of thousands of people with deceptive claims that they 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," Brown said.
Brown stated in a news release that the lawsuit seeks to shut down the company's unlawful operation before more people are exploited by the scam. He said the company and its affiliates, YTB Travel Networks Inc. and REZconnect Technologies Inc., operate an illegal scheme that only benefits members if and when they find enough new members to join the scam.
Brown is charging YTB and the company's founders, J. Lloyd "Coach" Tomer, J. Scott Tomer and J. Kim Sorensen, along with the company's chief operating officer, Andrew Cauthen, with operating an "endless chain scheme."
The lawsuit is the toughest one filed so far against the company since it started operations seven years ago. YTB runs Web sites for referring travel agents, or RTAs, online agencies that sell flights, cruises and vacation packages and earn a commission.
The RTAs pay a one-time cost of $449.95 for the company to set up their online travel agency and monthly fees of $49.95 to maintain the site.
In the lawsuit, Brown claims that the "defendants make untrue or misleading claims that consumers can become millionaires and receive special travel discounts offered only to professional travel agents."
The suit claims that consumers paid more than $103 million to the company for Web sites, but made only $13 million in travel commissions.
"Of the more than 200,000 consumers who purchased or maintained defendants' Web sites during 2007, 62 percent failed to earn a single travel commission - not even on their own personal travel," the lawsuit claims.
Under California's business practices statutes, the company is liable for $2,500 per violation of the law.
YTB employs nearly 300 people at its headquarters at 1901 E. Edwardsville Road in Wood River and is spending $25 million to expand the facility it purchased more than two years ago.
Critics of the company say YTB is a hoax because so few people break even selling travel, and the majority of the company's profit comes from selling to new RTAs. Critics and investigators have looked at YTB for the past several years; however, there has been no action taken against the company.
One of YTB's top sales representatives was investigated by the Florida attorney general for "deceptive business practices" last year, but the state did not file suit.
YTB officials said other states have looked at the company's business practices and found nothing illegal.
A report that YTB filed Tuesday with the U.S. Securities and Exchange Commission states that a civil action was filed against the company by the state of California. The company said the complaint alleges that it violated California's unfair competition and advertising laws.
The filing states that the company believes it has operated in full compliance with California law and will defend the case vigorously.
"The complaint was filed after 18 months of dialogue, initiated by the company with the attorney general to discuss the implementation of the 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 the California law."
The filing says the parties recently came to a standstill and that Monday's complaint, or lawsuit, is a result of the standstill.
A news release issued by CEO Scott Tomer said company officials were disappointed that California's attorney general decided to take action. Tomer said the company would defend the matter vigorously and is looking forward to having the court decide the merits of the case.
Proponents of the company said the timing in which Brown filed the lawsuit is somewhat suspicious, noting that YTB is hosting its annual convention at the America's Center in downtown St. Louis this week. A person who did not wish to be identified said that close to 20,000 people were in attendance at the convention.
During the past several years, YTB has grown significantly and was ranked 26th in a survey last year by Travel Weekly magazine, selling $414.5 million in trips. Nearly three-quarters of its revenue came from selling new agencies.
The company announced last month that it is contemplating the replacement of its referring travel agent business model with a franchise operating system, potentially in 2009. The model, if adopted, would be similar to other franchise businesses; however, details about price and product offerings remain under consideration.
The Associated Press contributed some information for this article.
Cynthia Ellis at http://www.thelegraph.com/
Competition is always good for the market place and the end consumer always Wins when companies compete.
However there comes a time when you feel sorry for even your biggest competitor and that day is today for me regarding the California YTB Lawsuit.
Just as I was a manager for Wells Fargo Bank I taught and trained people how to help homeowners refinance thier loans over to Wells Fargo from Countrywide, Morgan Chase, City Group, and other lenders to make Wells #1. I could only feel sadness for all of the employees that lost thier jobs when the market began to go down. Even though the Wells portforlio and business model had done better than other banks through this real estate storm you want to see these other financial institutions continue.
Thats how I feel about YTB California Lawsuit today many friends and family members I know over there that are stressed out and looking for secure income are effected by this news.
Our CEO has asked us to be respectful as we come in contact with others about this sensitive issue which is the kind of Class I expect from all of our Traverus Family. Let's all go into prayer for all of the thousands of people This will Effect.
California is the 2nd Largest state for YTB so this is very alarming to many.
YTB sued by California attorney general
WOOD RIVER - One of the city's largest employers and seller of online travel is being sued for $25 million by the California Attorney General's Office for operating a "gigantic pyramid scheme."
Attorney General Edmund G. Brown Jr. announced Tuesday that he filed suit against YourTravelBiz.com, a subsidiary of YTB International Inc., for recruiting tens of thousands of people with deceptive claims that they 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," Brown said.
Brown stated in a news release that the lawsuit seeks to shut down the company's unlawful operation before more people are exploited by the scam. He said the company and its affiliates, YTB Travel Networks Inc. and REZconnect Technologies Inc., operate an illegal scheme that only benefits members if and when they find enough new members to join the scam.
Brown is charging YTB and the company's founders, J. Lloyd "Coach" Tomer, J. Scott Tomer and J. Kim Sorensen, along with the company's chief operating officer, Andrew Cauthen, with operating an "endless chain scheme."
The lawsuit is the toughest one filed so far against the company since it started operations seven years ago. YTB runs Web sites for referring travel agents, or RTAs, online agencies that sell flights, cruises and vacation packages and earn a commission.
The RTAs pay a one-time cost of $449.95 for the company to set up their online travel agency and monthly fees of $49.95 to maintain the site.
In the lawsuit, Brown claims that the "defendants make untrue or misleading claims that consumers can become millionaires and receive special travel discounts offered only to professional travel agents."
The suit claims that consumers paid more than $103 million to the company for Web sites, but made only $13 million in travel commissions.
"Of the more than 200,000 consumers who purchased or maintained defendants' Web sites during 2007, 62 percent failed to earn a single travel commission - not even on their own personal travel," the lawsuit claims.
Under California's business practices statutes, the company is liable for $2,500 per violation of the law.
YTB employs nearly 300 people at its headquarters at 1901 E. Edwardsville Road in Wood River and is spending $25 million to expand the facility it purchased more than two years ago.
Critics of the company say YTB is a hoax because so few people break even selling travel, and the majority of the company's profit comes from selling to new RTAs. Critics and investigators have looked at YTB for the past several years; however, there has been no action taken against the company.
One of YTB's top sales representatives was investigated by the Florida attorney general for "deceptive business practices" last year, but the state did not file suit.
YTB officials said other states have looked at the company's business practices and found nothing illegal.
A report that YTB filed Tuesday with the U.S. Securities and Exchange Commission states that a civil action was filed against the company by the state of California. The company said the complaint alleges that it violated California's unfair competition and advertising laws.
The filing states that the company believes it has operated in full compliance with California law and will defend the case vigorously.
"The complaint was filed after 18 months of dialogue, initiated by the company with the attorney general to discuss the implementation of the 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 the California law."
The filing says the parties recently came to a standstill and that Monday's complaint, or lawsuit, is a result of the standstill.
A news release issued by CEO Scott Tomer said company officials were disappointed that California's attorney general decided to take action. Tomer said the company would defend the matter vigorously and is looking forward to having the court decide the merits of the case.
Proponents of the company said the timing in which Brown filed the lawsuit is somewhat suspicious, noting that YTB is hosting its annual convention at the America's Center in downtown St. Louis this week. A person who did not wish to be identified said that close to 20,000 people were in attendance at the convention.
During the past several years, YTB has grown significantly and was ranked 26th in a survey last year by Travel Weekly magazine, selling $414.5 million in trips. Nearly three-quarters of its revenue came from selling new agencies.
The company announced last month that it is contemplating the replacement of its referring travel agent business model with a franchise operating system, potentially in 2009. The model, if adopted, would be similar to other franchise businesses; however, details about price and product offerings remain under consideration.
The Associated Press contributed some information for this article.
Cynthia Ellis at http://www.thelegraph.com/
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