Types of pyramid schemes AND how YTB uses it

A pyramid scheme is a means of transferring money from duped investors at the bottom of a pyramid to those at the top, who initiate the recruitment of an endless chain or pyramid of participants. Pyramid promoters promise substantial income to those who “work the system,” but it is considered by law enforcement in most jurisdictions in the U.S. to be an unfair and deceptive practice because of the mathematical certainty that approximately 90% or more will always be in a losing position at the bottom – whether it collapses on its own, is shut down by authorities, evolves into another program, or moves on to another area.
While it is true that in most legitimate businesses, entrepreneurs lose money or eventually quit the business, the odds of failure are not guaranteed. Success is dependent on market forces and skill and the amount of time, money, and effort invested in the enterprise. However, in an illegal pyramid scheme, the more one invests in the enterprise, the more one loses – with the notable exception of those at the top of the pyramid, which are usually the first ones who entered into a given market. Success is dependent on time of entry and/or on willingness to aggressively recruit and deceive a downline of participants into believing the program is a legitimate enterprise.
Pyramid schemes come in many forms and with many disguises, including:

1. NAKED, NO-PRODUCT PYRAMID SCHEMES

Participants buy into the scheme and move up four or five levels towards the top by recruiting others, who must do the same. The top person pockets all the money and then the next ones in line move up. The originator may move on to start another pyramid. Since no products are offered, these are easy to detect and are often shut down rather quickly by authorities. Losses are usually no more than a few hundred or a few thousand dollars and aggregate harm is minimal, so they seldom attract much attention by law enforcement or by the media. Included in this category are pyramid games, such as the “airplane game,” or pyramid parties, such as the “dinner party,” etc.

2. GIFTING OR AFFINITY SCHEMES

These are essentially no-product pyramid schemes, but they are disguised as gifts given voluntarily in order to enter the pyramid. Promoters claim they are empowering women or churches or some other group of people striving to gain financial advantage. They do not fool most officials in law enforcement, and the media and the public often unite to support law enforcement in shutting them down. They have been successful in some states for brief periods of time, but seldom gain wide support. Aggregate losses to society are minimal.

3. REPORT CHAINS AND OTHER INEXPENSIVE PYRAMID SCHEMES PROMOTED OVER THE INTERNET

These involve spamming the Internet with offers to participate in an endless chain of useful “reports,” which are usually readily available information that has been photocopied and added to the chain, much like a chain letter. The cost to participate is very small – usually under $20. While they are hard to control in a medium as unregulated as the Internet, actual financial losses are almost trivial. The real harm is their tendency to hog valuable computer space and time. Internet matrices are also pyramid schemes that cause more irritation to serious web surfers than actual financial harm to participants.

4. PRODUCT-BASED PYRAMID SCHEMES

These are the pyramid schemes of choice for at least 90% of promoters of schemes designed to enrich a few at the expense of a multitude of downline investors. Recruits are deceived into buying “potions and lotions” with claims of magical properties and powers – and promises of huge income for sharing these dandy items with friends and neighbors. Promoters exploit the dreams and social capital of participants, who almost never file complaints with authorities when they come up empty – which happens to approximately 99.9% of them. Because participants don’t complain (for reasons I will explain another time), law enforcement seldom does anything to contain them. These programs go by such terms as “multi-level marketing” (MLM), “network marketing,” “consumer direct marketing,” etc.
Product-based pyramid schemes recruit aggressively until de facto saturation makes recruiting difficult in a given market, moving on to other markets or starting new “divisions,” thus maintaining themselves in a continuously revolving door of new recruits, each of whom buys or subscribes to products to get in on this “ground floor opportunity.” In order to succeed, one must first be deceived, then maintain a high level of deception, and finally go about aggressively deceiving others.

Aggregate losses to society from product-based pyramid schemes total tens of billions of dollars every year and affect millions of victims world-wide. Approximately 99.9% of participants lose money – far higher than for no-product pyramid schemes. Most recruits participate on a modest scale, buying a few products and then quitting. Harm to more serious participants ranges from a few hundred dollars to loss of one’s life savings, career, or worse – breakup of families, even depression and/or suicide. The ones who get hurt the most are individuals who most enthusiastically embrace the promises and deceptions of the promoters and put their savings, credit, and whole heart and soul into this bogus “business opportunity of a lifetime.” If you had read the thousands of letters we have received from victims world-wide, you would not see MLM as a harmless home business – and certainly not a profitable one.


For More Information Contact:

Daryl D. Alex
Regional Executive
Traverus Travel and TeleVerus Cell Phones
1.800.781.3254
1.877.744.3431
225.590.7700

YTB The Robbing Hood Of Travel

How many of you remember the legend of "Robin Hood"? who took from the rich and gave to the poor and the less fortunate; Now for those of you that do we have our very own 20th century legend However, this legend is spelled a little differently then
we are accustom to and his policy are all together different then that of the old "Robin Hood" is known as "The ROBBING Hood of Travel" and is the owner of YTB Travel International Inc. or more commonly know as yourtravelbiz.com. Who sells false hopes and dreams of wealth and luxurious cars and houses all for a $450.00 start up fee and a $50.00 monthly maintenance fee. However, Some, like California Attorney General Jerry Brown, say the whole thing's a scam that recruits thousands of members with deceptive claims. The only people reaching their dreams, they say, are a handful at the very top, while most get nothing. But YTB's legion of supporters say that's just not the case. They argue that the YTB complaints come from ex-agents who thought success would be handed to them, and that YTB Travel International Inc. is rigorously aboveboard. Whoever's right, there's no denying that YTB Travel International Inc. has tapped into something powerful, and has ridden it to become one of the fastest-growing small companies in the St. Louis region.

Along the way, the Tomers prospered. Scott Tomer and Sorensen each earned $2.3 million in cash, benefits and stock last year, according to filings with the Securities and Exchange Commission. Lloyd Tomer earned $3.5 million. Top salespeople made out well, too: A couple earned more than the top execs last year, and 11 sales directors topped $800,000, according to the company's publicly available income disclosure statement. Dozens more earned six figures.

But beneath them, the vast majority earned little.

YTB's 45,000 entry-level sales reps — the people who sell new travel agencies — on average earned $90.32 last year. And of the more than 200,000 people who paid the company as much as $1,000 to run a travel website in 2007, nearly 125,000 didn't earn a penny in commissions, according to Brown's lawsuit. Half of the rest earned less than $39. And while YTB took in $103 million last year from selling and maintaining websites, it paid out just $13.4 million in commissions for selling travel.

Those numbers led to grumbling that YTB is little more than a pyramid scheme, a shell game designed to enrich a few on the backs of many. Those grumbles grew for months, and then burst open with Brown's lawsuit, followed by news of an investigation by Illinois Attorney General Lisa Madigan and two class-action lawsuits filed in federal court in East St. Louis.

For More Information Contact:

Daryl D. Alex
Regional Executive
Traverus Travel and TeleVerus Cell Phones
1.800.781.3254
1.877.744.3431
225.590.7700

California YTB Travel Faces Lawsuit

YTB Travel News(press release):

In a story released by Doc Bunkum Stowaway YTB Travel has once again been found to be
an ILLEGAl online pyramid Scheme this time in the state of California. A stated in many of my older blogs I have stated that YTB Travel has been deceptiing of many of YTB Travel member with the concept that as YTB Travel Reps one could earn large sums of money by joining YTB Travel . Now, I'm not saying that this is not total true, for the minority of YTB Travel members, 75% to 85% to be more exact are not seeing any money in this YTB Travel opportunity while only 15% to 25% are making ALL the money off the backs of YTB Travel reps. But, maybe
you are tried of here this from me So, I'll let Mr. Stowaway come to my aide and reveal what has been found by The California Attorney General found.

Here we go again...

Embargoed Until 10:00 p.m. Pacific Time on August 4, 2008
Contact: California Attorney Generals Press Office 916-324-5500

Ca. Atty. Gen. Brown Sues To Topple Online Pyramid Scheme

LOS ANGELES--California Attorney General Edmund G. Brown Jr. today sued YourTravelBiz.com for operating a gigantic pyramid scheme that recruited tens of thousands of members with deceptive claims that members 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,” Attorney General Brown said. “Today’s lawsuit seeks to shut down the company’s unlawful operation before more people are exploited by the scam.”

YourTravelBiz.com and its affiliates operate an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scam. Once enrolled, members who join the pyramid scheme earn compensation for each new person they enlist, regardless of whether they sell any travel. The company lures new members by offering huge income opportunities through online travel agencies yet the typical person actually makes nothing selling travel.

According to company records there were over 200,000 members in 2007 who typically pay more than $1,000 per year--$449.95 to set up an “online travel agency” with a monthly fee of $49.95. In 2007, only 38 percent of the company’s members made any travel commissions. For the minority of members who made any travel commission in 2007, the median income was $39.00--less than one month’s cost to keep the Website. There are at least 139,000 of the company’s travel Websites, all virtually identical, on the Internet.

YourTravelBiz’s extensive marketing materials include videos of people driving Porsche and other luxury cars, holding ten-thousand dollar checks, and claiming to be raking in millions of dollars in profits. The company advertises through its Website http://www.ytb.com, and at conventions, workshops and nationwide sales meetings which have been held in California locations such as Los Angeles, Sacramento, San Francisco and San Diego.

Brown charges the company, its affiliates, and the company’s founders J. Lloyd Tomer, J. Scott Tomer, J. Kim Sorensen and Andrew Cauthen with operating an “endless chain scheme,” an unlawful pyramid in which a person pays money for the chance to receive money by recruiting new members to join the pyramid. Brown also charges the company with unfair business practices and false advertising practices including:

* Deceptive claims that members can earn millions of dollars with the company
* Operating without filing legally mandated documents with the attorney general and the Department of Corporations
* Selling an illegal travel discount program

Under California’s unfair business practices statute, the company is liable for $2,500 per violation of law. Attorney General Brown is suing YourTravelBiz.com to get a court order that:

* Bars the company from making false or misleading statements
* Assesses a civil penalty of at least $15,000,000 and at least $10,000,000 in restitution for Californians who were ripped off by the company.

From August 6 through 10, thousands of members are preparing to travel to St. Louis for a national convention to learn new techniques to recruit more victims into the illegal pyramid scheme. Last year at least 10,000 people attended a similar national conference. For more details on the company’s plan to perpetuate its scheme visit:

http://www.yourtravelbiz.com/bizRep/Biz ... -18-08.htm

For more information on pyramid schemes visit:

http://ag.ca.gov/consumers/general/pyramid_schemes.php

Any consumers who believe they have been bilked by YTB Travel should send a written complaint with copies of any supporting documentation to:

Office of the Attorney General
Public Inquiry Unit, P.O. Box 944255
Sacramento, CA 94244-2550

Or through an on-line complaint form:
http://ag.ca.gov/contact/complaint_form.php?cmplt=CL.

Today’s lawsuit against YourTravelBiz.com, filed in Los Angeles Superior Court today, is attached. The lawsuit also names affiliates which include YTB Travel Network, Inc., YTB Travel Network of Illinois,Inc., as well as the company’s founders J. Lloyd Tomer, J. Scott Tomer, J. Kim Sorensen and Andrew Cauthen.

# # #
Doc Bunkum
Stowaway

Now, I don't want anyone to think that I'm bashing YTB Travel or any other company in these blogs because I'm not and nor do I take any glory in the negative events that YTB Travel has be apart of in the past year are so, My main goal is to help a person make the Best Educated Choice as to what is the best vechile to achieve their goals and dreams.

For More Information Contact:

Daryl D. Alex
Regional Executive
Traverus Travel
1.877.744.3134
225.590.7700