More Exaggerations and Misinformation

Here is a link to a MLM company's "agent" where he/she is documenting the money saved on the FAM and discounted trips. As a legitimate agent, I can see no reason to document this and put it on the web for all to see. Last time I checked, Walmart does not post their cost from distributors for the public to compare. Perhaps the reason this was posted was to entice someone to "travel like an insider" and to gain all these discounts and FAM trips that the MLM companies claim they never tout? You be the judge.

But a few comments on the presentation itself.

• The MSY trip (that is New Orleans for the MLM crowd) has incredibly exaggerated pricing on the retail end. This was in AUGUST. This was Post-K. I doubt there was a room selling in town that was more than $150 a night. Certainly not $279 per night. This is New ORLEANS not New YORK! The FAM was done by the CVB. Do you think they are offering space and values like that during their busy times? Come on! And a small note, the WORLD renowned coffee place on Decatur Street is called Cafe Du Monde.....not Cafe du Mundo! And again, this is New Orleans and not New York. The Beignets are $3 and the Cafe au lait is $2 for a total of $5 per person--not the $18.
• On the PVR trip (Puerto Vallarta for the MLM crowd), the claims are once again exaggerated. First, hotels do NOT pay 60% commission. The "agent" probably earned 10% commission on the $118.98 rate of which 40% went to the parent MLM company. The agent "discount" a whopping $7.13. Again, But what a bargain. I cannot search history, but if I look at rates for THIS November for a single night, I am getting (as a consumer right from their reservation office) $147 a night. Figuring in inflation, it does not seem to be so much of a deal. And if I snoop to one of my preferred vendors that has a contract with the hotel, I am finding the same room for $129 a night. Mind you this is pricing to the consumer and NOT an agent rate. So, are you REALLY saving THAT much?
• LAS (Las Vegas for the MLM crowd), is a total exaggeration. Most of the packages to Vegas will include a lot of the amenities that are shown to be additional. And I would hope that the retail guest would not get the "guided tour" and the "travel agent education class". And again, if this "agent" knew anything about the destination, they would certainly know that a breakfast for two almost ANYWHERE is going to cost more than $10!

Here is the link to the PDF file:
http://www.journeyshappen.com/My%20Fam%20Trips.pdf

And I know there will be some comments made to this post about not being able to control the "agents" and if it was approved by the MLM company it woudl have a secret code at the top. But you know what? The consumer does not know that. The consumer goes on what they see. And what they see here is, quite honestly, a crock.

I know you cannot control everyone, but my suggestion to the MLMs out there is to maybe be a little more concerned with vetting out your members. It honestly takes more than $445 and $50 a month to be a travel agent!

Consumer Fraud in the United States (FTC)

This document is VERY dry, but here is an excerpt on Fraudulent Business Opportunities and Pyramid Schemes. (Caution, 128 pages long)

http://www.ftc.gov/opa/2007/10/fraud.pdf

Fraudulent Business Opportunities and Pyramid Schemes

Another change was made to the questions about two of the money making
opportunities that were included in both surveys – fraudulent business opportunities and pyramid schemes.

Pyramid scheme promoters often claim that purchasers will operate their own
businesses selling a particular product or service and that they will make money both from their own sales and from those of others they recruit to join the program. Although such a business may look like a legitimate multi-level marketing program, it differs because the income earned by participants comes ultimately from recruiting, rather than the sale of products or services to consumers. Most participants in pyramid schemes lose money because the program really just transfers money from those who have joined most recently to those who have been involved for a longer period of time. At any point in time, the vast majority of those who have joined the program – often 90 percent or more – will not have recouped the money they paid to join.

Business opportunity offerings also involve consumers operating their own
businesses selling particular products or services. Business opportunity offerings
generally include some package of information, equipment, and services that purportedly will enable the consumer to establish and operate a successful business. Such offerings often appeal to consumers who have little or no business experience because they supposedly provide everything needed to own and operate the business. However, fraudulent business opportunity offerings often involve false promises that purchasers will make a large amount of money. Similarly, sellers sometimes make false promises that they will provide purchasers with assistance in finding customers or locations. For example, sellers of fraudulent vending machine business opportunities may promise to provide high-volume locations where purchasers can place their machines. Promises that the business is certain to make at least a specific income or that customers will be provided can lead potential purchasers – particularly those without experience operating their own businesses – to believe that there is little risk in purchasing the business. Potential purchasers believe they will not have to do a lot of selling and they are highly likely to be successful.

MLM and Credit Cards

An interesting topic has come up regarding merchants to be PCI Compliant. Apparently ARC is modifying it's agreement in a few weeks. I wonder how this all will factor in when there are so many MLM agents each needing to comply. I would imagine that having hundreds of thousands of agents involved in this has to be an issue in terms of security, identity theft, etc.

From the website Airline Training Council
http://www.airlinetraining.org/en/sempciwebinar.shtml

As credit card forms of payment for travel service purchases continue to grow, despite various efforts by certain travel suppliers to encourage alternative payment systems, credit card companies are continuing their efforts to assure that travel retailer merchants, travel service providers, and travel suppliers themselves adopt the credit card data protection standards mandated by the Payment Card Industry (PCI) Security Standards Council. The Council is a joint body, founded by American Express, Discover Financial Services, JCB, MasterCard Worldwide, and Visa International, to develop, enhance, disseminate and assist with implementation of standards for credit card security.

The Council manages an industry protocol referred to as the PCI Data Security Standard (DSS), a common set of industry tools and measurements to help ensure the safe handling of sensitive credit card data and the protection of cardholder information. In general terms, any entity which stores, processes, or transmits cardholder data (specifically the primary account number) must comply with the PCI DSS.

Even if an entity does not operate an online booking web site (which must comply with the PCI DSS despite already having an SSL secure certificate and web site "padlock"), so long as an entity uses the Internet to connect to a GDS, a travel supplier agent booking portal, a payment portal for online processing of agency service charges, a settlement system for airline ticket sales or travel sales transactions, a web-based storage or back-up facility for back-office accounting or customer profile data, or any other Internet-facing portal or application (including standard e-mail) used in the transmission of credit card data and cardholder information, the entity must comply with the PCI DSS.

While individual credit card companies have had security and account protection standards for quite some time, a collective effort using joint PCI DSS compliance is now in force and will make it easier for all travel merchants to comply more efficiently and effectively. Travel agencies may have noticed recent changes to GDS login and password management to be more PCI compliant.

IATA member airlines, at their Passenger Agency Conference in Geneva in June 2007, agreed to require agencies to be PCI compliant in order to satisfy IATA resolutions and accreditation requirements.

The Airlines Reporting Corporation (ARC), effective 12 November 2007, will amend the ARC Agent Reporting Agreement and the ARC CTD Reporting Agreement to require U.S. travel agencies and corporate travel departments which are ARC-accredited to be PCI compliant. A summary of ARC's changes to the Agreements, including those amendments regarding PCI, are available on the ARC web site.

A Sampling of Credentials

I am seeking out other samples of credentials. This one is from YTB. To many front desk agents, rental desk agents, and other front line employees in the hospitality industry, this may look like an official industry sanctioned identification card. When in reality it is merely an "employee" identification card.

It is my understanding that this card is provided upon joining YTB. I have also heard that members are encouraged to use this card to attempt to gain discounts and upgrades, yet it is never guaranteed. This card is supplied without the benefit of any training regardless of the level (or lack) of professionalism.

But these cards are everywhere. A quick search on Google for "Travel Agent Card" revealed the following examples. Some were MLM opportunities, others were simply scams, others were travel clubs. The common thread was that they were offering purported legitimate credentials to an industry that has let this get out of hand. What is also interesting is that most of these cards also come up when you Google "IATAN Card" and "CLIA Card".

Suppliers, two of these cards are legitimate. Do your front line people know the difference? Or are they giving away the farm to someone who does not deserve it?

Exaggerations from the beginning

This excerpt was from a paid press release located here:
http://www.prweb.com/releases/2006/7/prweb407254.htm

And it demonstrates that the numbers that are put out there to consumers are very misleading. On one hand, there are claims of $226 million in 2006. And this one claims $500 million in 2005 and a target of $2.5 billion for 2006.

“It’s brilliant! Who do you know at Expedia?” Doug asks “Do you even know where Expedia is? If I tell anyone I’m a Referring Travel Agent do you know what the very next thing out of their mouth is?” Doug answers “Can you get me a deal to_______?” So far it seems to be working, booking over $500 million in travel services in 2005 and thus far 2006 is showing indications that the company could exceed 5 times that amount, with expectations of $2.5 Billion in travel bookings for the current fiscal year.

Perks and Credentials

Over the past few weeks, it has been said that the MLM companies do indeed promote travel and NOT the perks, discounts, and credentials. If you look at the "About Us" page of any MLM travel company, the message is pretty clear. They are indeed promoting the credentials, the perks, and the discounts. This excerpt was taken from this website:

http://www.ytbtravelnetwork.com/2.html

YTB Offers You

A real, tangible home-based Travel Agency Business you can run from anywhere in the world or from the comfort of your kitchen table! Huge discounts on hotels, car rentals, luxury cruises, upgrades, exotic vacation packages and many more travel perks Personal travel agent photo ID card and credentials State of the art travel agency in greater St. Louis Up to 60% paid commissions on your personal website Online booking engines Affiliate marketing program Company familiarization trips Total service and support And so much more!

An Interesting Comment

I found this excerpt on a MLM "About Us" page and the first question that comes to mind is, "If network marketing is such a good business model, why have the last three gone bankrupt or closed due to "unfortunate circumstances."?

We have been looking for that right company for years. Our last 3 networking businesses went bankrupt or simply closed down due to unfortunate circumstances. Before that, Nick was downsized out of his job.

We lost our first home and had to move in with a friend. We slept on the floor in one room for almost a year.