YTB Executives Being Sued In FEDERAL Court In Illinois

Developing story....but from the Alton Telegraph:

The suit, filed Friday in U.S. District Court for Southern Illinois, names two specific plaintiffs, Faye Morris of St. Louis and Kwame Thompson of Atlanta, Ga., but seeks class action status on behalf of potentially more than 1,000 people who were members of the YTB travel network, either as independent marketing representatives or referring travel agents.

Revisiting Ted Lindauer And His Threatened Suit

Ted Lindauer and his warnings have been a topic of interest this week as well. Many people have asked me about the letter to the Board of YTB.

Read the documents from Ted Lindauer and make your own decision if YTB had been warned to clean up their act or not. Remember, this is a man who was loved by YTB and when the issues were brought to light, he mysteriously fell from grace. When he went public with his accusations and threatened a lawsuit, all of a sudden he disappeared again. For a period, he had a statement on his website that he and Coach spoke and worked things out. There was no detail to clarify that statement, but now all that is there is a copy of his resume.

Calls to YTB at the time indicated that he did not work for the company any longer, yet many Reps have indicated that he does indeed still work for the company. Please look at this post and you can see and hear it from someone that apparently (in his mind) knows!

My guess: Ted got a big check and a thick agreement to never talk about YTB again.

The letter that appeared on his site and the subsequent letter to the Board of Directors of YTB can be found here.

Attendance Records?

While the spin machine is claiming 18,000 for training and 23,000 for the opening ceremonies, I am hearing a completely different story from a journalist that was there.

I went to the opening session of the convention yesterday. There were a lot of people there, but not as many as I think they'd hoped.
They said 18,000, and with no independent way to confirm that, that's what I put in my story about it. It's possible that they had 18,000, but they came nowhere close to filling that room (basically half the Edward Jones Dome). It might have been 15K with some optimistic estimating going on.

Now is we take the generous 15,000 (and mind you this is coming from a journalist in St. Louis that knows what a full dome looks like) you need to wonder how many are actually affiliated with YTB and have singed an agreement? They were encouraged to bring friends, family, and guests. In a comment I thought maybe 7500, and that seems to be about right if everyone brought a spouse.

Well, it is becoming pretty clear that there are false claims on all fronts with YTB.

This Week's Top 5

Wanna know what everyone is reading?  Here are the week's top 5 blog posts:

5. Illinois Attorney General Launches Investigation
4. In The Hot Seat With John Frenaye
3. The YTB Response
2. Firemedic Throws Stones In Glass Houses
and the number one blog post of the week........

1. California Launches Suit To Topple YTB


No real surprises here. But when you look at the entities that are reading this blog now, it is interesting. YTB has taken a multi times a day interest. From the list of YTB suppliers, I have to say that 90% of them have checked in daily since Tuesday. And there are a lot of domains ending in dot gov reading now.

Live From St. Louis

The spin continues and it is amusing.

It seems the YTB defense will be that the Attorney General does not understand network marketing. Perhaps the Attorney General feels that YTB does not understand the concept of the law. But Doug said that all will be well so we need to take him at his word and sleep soundly. Especially the California Directors...aka Does 1 to 100. If anyone has a direct line to Jerry Brown, please let him know that Doug has handled this and there is no reason to go forward. It is a simple misunderstanding!

To those that do not understand satire...that was an example. But Doug did make a few points that should be pointed out.

In YTB there are two separate companies. Yet the Directors (one of the companies) are the ones instructing the travel(the other company) training classes. This seems like they may not be so separate at all.

The last two days have been spent in training classes from some of our Directors that have been exceptional to say the least.

He also talks about a smirk

I’ve seen more of a steely eyed smirk on most of the faces here.

Well, if anyone has met Scott Tomer, you know that look. It is nothing new and it is the same look he has when heading to the bank depositing all the RTA monthly fees.

And finally in another attempt at deflection we have this:

YTB is on the map folks and if by chance, you are not here in St. Louis today, head on over to any newsstand and book store and take a gander at who is on the front cover of the Saturday Evening Post this month.

Well, I am not sure they are "on the map" but they certainly "in the scope". It is a nice fluff piece in the Saturday Evening Post (although the link points to a Tony Bennett cover) and I can assure you that some columnist (anyone know what Dan Rather is doing these days) is getting some heat for not fact checking as well as he should have. What an embarrassment for the Saturday Evening Post to print a piece like that and have Coach be the target of the largest suite ever filed in the US against a MLM company/ Maybe they can do a "Fall from grace" piece in s little bit.

Protecting Professionalism

This was just published by Travel Research Online and I think it is an important point of view that needs to be shared:

Protecting Professionalism

This week's announcement that the California Attorney General's office was filing suit against YTB is now being followed on by an investigation by the Illinois Attorney General's office. It is welcome news that the states are finally taking action against the card mills and MLM companies that have turned an untrained evangelical horde onto the streets claiming to be travel professionals.

The battle is far from over. There is always another permutation of these companies flying under the radar. But what is remarkable in this particular instance is the way in which the travel media at large failed to take up the cry. True, Royal Caribbean and a few other suppliers cut card mills out of their rosters, but where was the travel media? By and large they actually became hives for MLM "travel agents". The bulletin boards and the online portals of major travel media outlets became at best a place where the issue was debated in an almost embarrassing fashion or at their worst where the MLM'ers actually held sway. YTB was placed on a "power list" by virtue of its "sales volume" without any serious journalistic questioning of its business methods or its impact on professionalism. I suspect that an analysis of the ranks of the circulation, electronic and print, of many of the media outlets would reveal an uncomfortably high percentage of pseudo-agents.

It is time for the media of the travel industry to take a real editorial stand on this issue, to get off the fence and denounce the business practices of companies that crank out travel agents in an assembly line fashion with no training and no real passion for the business. While the efforts of suppliers are appreciated, their concerns are not the same as that of retail travel professionals. It is the media that claims to be the voice of the retail travel agent and it is the media that can best amplify the efforts of travel agents who have taken a stand against the card mills and MLMs.

Richard Earls
Publisher
Travel Research Online

To the trade media I ask are you listening? Do you agree? Will you act? Agents reading this--please pass the message along!

Bermuda Takes An Interest

According to the Royal Gazette, Bermuda is interested following the charges as well. I know when YTB launched in Bermuda, they were questioned for being a pyramid scheme (here and here)  as well, but apparently their argument was persuasive enough to allow them to go forward and recruit 700 Bermudian citizens into the program.

A recognized authority on MLMs has told me that in the MLM business, international expansion can lead to federal inquiries. Foreign governments can see that the US is sending their "trash" to operate in their country, and now the Stste departments begin to talk. Before long, State asks the FTC to find out what is going on and then the FTC brings out the hammer.

So Bermuda and Canada might be worth watching in the coming months.