OpTree

The news just keeps getting worse for YTB after being sued by former employees, having a class action suit filed against them and being sued by the California Attorney General, along with the most recent firings of over 20 of its employees, now comes word that a board member has resigned.

John Simmons, a prominent attorney, has just announced that he has resigned from the board of YTB. Both Simmons and the online travel company were careful when making statements about his departure.

YTB released a statement saying, “Mr. Simmons’ resignation was prompted by his belief that as a general matter he could not effectively influence the practices of the company’s management. Mr. Simmons has not furnished the company with any written correspondence concerning the circumstances surrounding his resignation.”

Simmons, an attorney specializing in personal injury law, did return calls to reporters, but declined to offer any other statement, instead saying that he had reviewed the statement given by the company and that comment will have to suffice.

Simmons served on the company’s Investment Committee and was considered and Independent Director by YTB.

YTB made sure to file all necessary papers, and did file the appropriate 8K with the SEC to formally announce the resignation.

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Adding more insult to injury for YTB, we just got word that The Waterford School District in Michigan which was once a distributor of YTB has decided to disassociate themselves from the embattled company.

“Last fall, in an effort to generate revenue for the Waterford school district, we entered into an agreement with YTB Travel to place a link to their website. The Waterford School District did not pay any start up costs and we have never paid any monthly maintenance fees to provide the link.”
“During the last school year, the Waterford School District did receive small commission checks as a result of our staff and community utilizing YTB Travel. Just recently, the decision to disassociate ourselves from YTB Travel was made. We no longer promote their travel website on our website.”

The Waterford School District

We actually have a cached version of the old webiste which once had a link to YTB on it which you can see here. It also seems the YTB/Waterford site is still up as well. Guess no one at YTB was told of the breakup. The new version of the Waterford site no longer features the YTB link.

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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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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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