OpTree

The Professional Association of Travel Hosts (PATH) has just formally released a statement with regards to recent legal action taken against YTB.  PATH applauded the recent legal action taken against the online travel company by the State of California. The California Attorney General claims that YTB is operating a “gigantic pyramid scheme” that has defrauded thousands of people.

A Host travel agency is one that sells travel plans, programs, trips, etc. much like YTB, but through legitimate means. A legitimate Host agency will not profit from the recruitment of new agents and only makes money by selling travel plans and trips.

Andi Mysza, president of PATH, believes that the lawsuit is in the best interest of legitimate travel professionals. “This is good news for the hosting industry and I only hope that other states and the federal government will follow suit,” he said. “YTB and other card mills have been preying on unsuspecting consumers for too long. For those who really want to develop a travel business and actively sell travel, PATH provides agents with a means of locating reputable, legitimate host agencies which are not involved with multilevel marketing.”

PATH has over 18 member companies and is dedicated to upholding the ethical standards of travel professionals. In fact, PATH members are not permitted to be in any way part of a network marketing, or multilevel marketing program. All PATH members primary source of income is from the sale of travel. PATH says that it is often hard to tell a legitimate host agency from a bad one, and that they are striving to clean up the industry.

No new news in the past couple days about the YTB lawsuit, although people seem to be coming out of the woodwork speaking out against the travel company.

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Now that Barry Minkow has settle his dispute with USANA, its time for the former criminal, and founder of the The Fraud Discovery Institute to look for a new target. Unfortunately for Pre Paid Legal, they are it.

The Fraud Discover Institute released its first ever “Top 10 Red Flags for Fraud” list and it details many alleged claims of fraud and misrepresentations made against Pre-Paid.

The list is backed by MLM expert, Robert Fitpatrick, who explains the sources and mathematical equations used to back up the claims on the top ten list, “News media exposes and lawsuits have combined with a mathematic threshold of ‘information saturation’ to bring [Pre-Paid Legal] to this position of lost faith within its market. The saturation point is based on the mathematical limits that the company has already reached in the North American market. Unlike other multi-level marketing schemes that also quickly saturate home markets, [Pre-Paid Legal] cannot expand to other countries with its current product offering.”

Minkow used a strange analogy when describing the motivation behind the creation of the list, saying that they list was designed to show a similarity between Pre-Paid’s recent second quarter announcement and an iceberg, “Both an iceberg and Pre-Paid Legal’s reporting of their earnings have one thing in common: Their true realities exist below the surface and are concealed from the casual observer’s sight.”

The list is a compilation of claims about the company withholding info about recruitment, reporting less than accurate numbers, declining sales, declining number of associates and artificially inflating stock prices.

Minkow, along with the FDI spent years torturing USANA, and now that everything has been settled, he had to find a new target. Unfortunately for Pre-Paid Legal, they are it. Minkows new website dedicated to bringing down Pre-Paid (prepaidillegal.com) is pretty fancy and it seems as if he is really committed to bringing Pre-Paid down. I’m sure there will be much more to the story as Pre-Paid responds to the allegations made by the FDI.

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The DSA has finally made a statement regarding the status of one of their companies that is currently in trouble, namely, YTB, the online travel company and DSA member currently being sued in 2 states for over $100 million dollars for fraud as well as the California DA. Recently, there have been several DSA member companies that have run into some major problems, making us wonder what the purpose of the DSA really is. Their requirements are so strict, yet recently DSA member companies have closed, (Weekenders) or been sued (YTB). Finally, the DSA, who has been awfully quiet lately, has released a statement:

“DSA maintains a rigorous Code of Ethics that provides both independent sales representatives and consumers with the opportunity to file complaints with the independent DSA Code Administrator. The DSA Code of Ethics prohibits pyramid schemes, unsubstantiated earnings claims and unfair or deceptive sales and recruiting practices. As is the case with any DSA member company, YTB distributors and customers who feel they have been treated unfairly are invited to file a complaint under DSA’s Code of Ethics.

“Although the allegations made by the California Attorney General against YourTravelBiz.com are unproven, DSA takes any allegations of this kind seriously and has set in motion the standard procedures it follows when a member company is accused of possible violations of the DSA Code of Ethics.

Specifically, DSA is:
-Seeking additional information about the complaint and the allegations from both the California Attorney General and YTB.
-Advising the independent DSA Code Administrator of these developments and forwarding any additional information DSA receives.
-Evaluating the materials related to this case and will take further action as appropriate.
Closely monitoring the situation and keeping the Code Administrator and other DSA members apprised of related news and developments

“Information on the Code of Ethics, the complaint process and penalties for violation can be found on the DSA Web site at www.dsa.org.”

Its great that they have finally said something about whats going on- we’re still waiting on the official word on what they are going to do about all the people who lost money with Weekenders- the same people who trusted the company due to its association with the DSA but this is absolutely a step in the right direction.

It is our strong opinion that in cases where a company is being sued for fraud by a State agency or has an excessive number of complaints against them filed with the Better Business Bureau, it should be the Associations obligation to notify its members and put the company on probation until the matters are settled. The problem is, then it may find the member company will withhold membership dues which is the lifeline of the DSA.

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As we told you a week ago, YTB Travel is being sued by the California Attorney General claiming that the online travel company is operating a pyramid scheme. Now, YTB has more problems on its hand. Two former agents have filed a $100 million dollar class action suit, and the Better Business Bureau has released reports claiming the have received numerous complaints against the company and has a rating of “unsatisfactory”.

The new suit that has been filed in federal court in Illinois makes similar claims to that of the California suit. The suit claims that YTB ran an illegal pyramid scheme and defrauded “agents” out of thousands of dollars. The class action suit was filed both on behalf of as many as 1,000 people who were former YTB members.

The Better Business Bureau also released many complaints it had received about the company. The BBB says that they have received complaints about the company in at least 31 states.

The lawsuit, brought about by the plaintiffs, two former YTB agents, Faye Morris of St. Louis and Kwame Thompson of Atlanta was filed Friday in federal court in Illinois and seeks $100 million in damages on behalf of the named plaintiffs along with 1,000 other former members.

The defendants named in the suit were the same as in the California suit; YTB International Inc., YourTravelBiz.Com, YTB Travel Network Inc., YTB Travel Network of Illinois and its technology unit Rezconnect Technologies.

Along with the company itself, several officers of YTB were also named including founder J. Lloyd Tomer.

Executive Officer Scott Toner, released a brief statement addressing the accusations saying that they were “unaware” of any unresolved BBB complaints. He added, “we are proud of our business model and how our operations are conducted in an ethical and transparent way. We also are wholly confident that our business model will withstand scrutiny, and look forward to setting the record straight in court.”

Class action suits are easy to file against publicly traded company so expect to see more of them.  Unfortunately, a lot of people will try and jump on this bandwagon and make it frustrating for YTB - especially if it is not guilty of the charges alleged.

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