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 Travel International Inc. Laid-off 25 employees?

YTB Travel News(Press Release): After doing a little private investigative work YTB Travel News has uncovered some very disappointing news
as reported by Cynthia Ellis of The Telegraph; YTB Travel International Inc. has began to lay-off some of it's employees from it's corporate
headquarters as of Wednesday August 27, 2008. However, the following story can
give us better insight as to "WHY" these alarming steps were taken:

By CYNTHIA M. ELLIS
The Telegraph

WOOD RIVER - YTB International Inc. reportedly terminated the employment of 25 people from its corporate headquarters on Wednesday.

A laid-off employee, who asked to remain anonymous, said that he and two dozen others were told their positions were being eliminated due to the "current economic environment in the United States," and that the company's management "regret this necessary decision."

The man said company officials knew Tuesday that positions would be eliminated, because they scheduled meetings with the employees Wednesday to inform them about the situation.

"I was told by my manager there would be a meeting, and I had no idea what it was about," he said. "I didn't know if I had done something wrong. I was stressing all night."

The man said that ever since the California Attorney General's Office filed a lawsuit against YTB Travel International Inc. in early August that claimed the company was operating a "gigantic pyramid scheme," company officials have been telling employees that "everything is fine."

"I don't think it's fine," he said.

Legal action was taken against YourTravelBiz.com, a subsidiary of YTB International Inc., for allegedly recruiting tens of thousands of people with deceptive claims that they could earn huge sums of money through its online travel agencies.

So far, the lawsuit is the toughest one filed against the company since it started operations seven years ago. YTB Travel International Inc. runs Web sites for referring travel agents, online agencies that sell flights, cruises and vacation packages and earn a commission.

Since the filing of the California suit, a class action lawsuit has been filed in federal court in East St. Louis and a third in Madison County Circuit Court. A judge has scheduled a hearing for Sept. 2 in the circuit court case filed in Edwardsville by Terry and Teresa Braswell, in which the couple claim that YTB Travel International Inc. Chairman J. Lloyd "Coach" Tomer "repudiated" a contract with the couple that called for them to receive about $10,000 per month.

The company has defended itself against the legal actions.

"As a matter of policy, we do not comment on pending litigation. However, we can tell you that YTB Travel International Inc. believes the allegations we've heard are without merit, and we will vigorously defend ourselves," YTB Travel International Inc. Chief Executive Officer Scott Tomer said recently in a prepared statement.

Tomer said the company is proud of its business model and how the operations are conducted in an ethical and transparent way by management. Last month, the company announced that it was contemplating the replacement of its referring travel agent business model with a franchise operating system, to start in 2009. The model, if adopted, would be similar to other franchise businesses; however, details about the plan still are in the works.

YTB Travel International Inc. officials did not respond to an e-mail sent by The Telegraph, asking questions about its layoffs or whether any legal actions have had a financial impact on the company.

During the past several years, YTB Travel International Inc. has grown significantly; last year, it was ranked 26th in a survey conducted by Travel Weekly magazine, selling $414.5 million. Reports show that nearly three-quarters of its revenue came from selling new agencies rather than from actual travel sales.

YTB Travel International Inc. employs between 300 and 350 people at its headquarters at 1901 E. Edwardsville Road, where it is spending $25 million to expand the facility it purchased more than two years ago.

Wood River Mayor Fred Ufert said he hates to see employees lose their jobs. He said the layoffs would hurt the city economically, as well.

"Some of the employees live in the city," Ufert said. "It's a bad thing for everyone. We can only hope they will get through it."

The former YTB Travel International employee said the situation is upsetting, but he has come to the conclusion that he doesn't need to be working for a company that cannot be honest with its employees. He said it is likely that more positions will be terminated.

"We could clearly see something was going but were assured everything was OK," he said. "Does it seem OK if they are letting people go?"

In closing, YTB Travel International Inc. doesn't appear to be as recession proof as it has everyone thinking I mean to make such a bold step as this just days before YTB Travel International is to meet with a circuit judge to answer the allegations pending from The California suit, The class action lawsuit that has been filed in federal court in East St. Louis and a third in Madison County Circuit Court is a sure sign that everything isn't at all what YTB Travel International Inc.Chief Executive Officer Scott Tomer and others are confessing them to be, it's funny that I choose the word "CONFESSING"
maybe it time that YTB Travel International Inc. began to do just that "CONFESS" it's wrong doing and set their captives FREE!!!!!!!

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 Travel International deceives yet another member

YTB Travel News(Press Release): Here is another story of misrepresentation by YTB Travel International as reported by The St. Louis Business Journal - by Kelsey Volkmann

Ana Temple wanted to make some extra cash to supplement her income as a finance and human resources director for an architectural firm.

So when a family friend told her aboutYourTravelBiz.com and how she could set up her own online travel agency, she jumped at the chance in April.

She paid nearly $500 to set up a Web site through Wood River, Ill.-based YTB International. The company told her she'd make 60 percent commission off every trip she booked.

But then she got her paycheck: $3 per airline ticket.

That's when the company told her travel agents make 60 percent of what YTB Travel makes, she said.

"I feel so deceived," said Temple, a Copiague, N.Y., resident. "They told us people could retire off this and take free trips. It's all a bunch of bull."

Several YTB Travel agents vigorously defended YTB Travel at the company's national convention in St. Louis this week, saying they had made money and received discounts on personal travel.

"That's because they got thousands of suckers underneath them and they're making money off us," said Temple, 38.

When she tried to cancel, YTB Travel refused, saying it was past the five-day cancellation period. But Temple said she didn't receive her packet informing her of the cancellation policy until after the five- day period expired.

YTB Travel denied this and she was still required to read the online terms and conditions before paying.

"They gave us so much false information," she said. "Total, total lies."

I know how Mrs. Temple is feeling because like her I too was deceived my YTB Travel International when told that I too with earn that same 60% commission on every thing booked from my site. However, I too was never ever told that it would 60% of what was left after YTB Travel International was paid by their hosting company. Now if that isn't misrepresenting I don't know what is and if YTB Travel International lies about this then what else has YTB Travel International lied about?

For more information contact:

Daryl D. Alex
Regional Executive
Traverus Travel
1.877.744.3431
225.590.7700
Traverus Travel Update

St. Louis slaps YTB Travel with Class-action lawsuit

YTB Travel News(press Release): Just like The Morton Salt Box States "When It Rains It Pours" this time that statement rings true for YTB Travel Just day after one of YTB Travel's Annual Conventions which was held in St. Louis this year more trouble was announcement by
ST. LOUIS POST-DISPATCH:

Another layer of trouble has landed on Wood River-based travel company YTB International, this one in the form of a class-action lawsuit filed Friday in East St. Louis.

Attorneys representing two agents and sales reps for the company say it is an "illegal pyramid scheme" and "employs an illegal chain referral sales technique" in violation of Illinois law. They are seeking $100 million in damages for the at least 140,000 agents who have joined YTB Travel.

In a filing with the Securities and Exchange Commission, the company said it "intends to vigorously defend the case."

The suit's charges echo those in a suit filed last week by California Attorney General Jerry Brown, who called the company a "gigantic pyramid scheme" in which 140,000 "referring travel agents" pay $450 up front and $50 a month to sell travel but rarely earn any money on commissions. Meanwhile, sales reps — including many of those travel agents — receive commissions and bonuses to sign up more agents.

"These are all different components of the same pyramid scheme," said Christian Montroy, the East St. Louis attorney who filed the suit.

The Illinois attorney general also is investigating YTB Travel, and the local chapter of the Better Business Bureau(BBB) slapped YTB Travel with a negative report last week.

Also on Monday, YTB Travel disclosed in an SEC filing that its application for listing on the American Stock Exchange was withdrawn Friday. The company's stock is currently traded on the Over The Counter bulletin board and it has been trying to get on a more prestigious exchange.

The company didn't say why it withdrew its application to AMEX and didn't respond to questions Monday.

However, the only thing that is different from that morton salt box and YTB Travel is the little girl on the box has an umbrella and YTB Travel doesn't.

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

Illinois launches probe into YTB Travel

YTB Travel News(press release): More YTB Travel News as members of YTB Travel International the
Wood River based travel company, gathered in St. Louis for The YTB Travel Annual Convention, the unthinkable event was announced on
the heels of a eariler report this week that California Attorney
General called YTB Travel "A gigantic Pyramid Scheme" and just a day later The Illinios Attorney General's Office announced it also has launched a probe into YTB Travel International.And the local chapter of the Better Business Bureau(BBB) issued a report detailing complaints it has heard of misleading offers made by YTB Travel International sales reps.And just as before YTB Travel International has denied any wrongdoing. However,The Illinois Attorney General and Better Business Bureau(
BBB) probes are the latest signs of deeper problems of the fast-growing company, which sells cruises, flights and online travel agencies websites in which people can earn commissions selling cruises and flights for a start up cost of $450 up front and a monthly fee of $50.

Nevertheless, by the end of March, YTB Travel has made claims to have sold 139,000 of these agencies and had claimed that YTB Travel
has more than 340,000 sales reps, who pay nothing But, are earning commissions for each agent they sign up.


Natalie Bauer, a spokesperson for The Illinios Attorney General Lisa Madigan would not say exactly when the Illinios probe started,did state the probe had indeed been opened for a while now and are in the process of conversing with The California Attorney General's Office in hopes to gather information of their findings. Her office has received 70 complaints about YTB Travel since 2002.

For More Information Contact:

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

YTB Travel News: Bermuda Sun Investigation reveals card mill

YTB Travel NEWS:(PRESS RELEASE)
"A Bermuda Sun investigation suggests that most people investing in YTB Travel in the U.S. make their money by recruiting new subscribers, rather than from selling travel.

Mr. Furbert - who plans to launch YTB Travel in Bermuda next month - denied yesterday that the company is a pyramid scheme.

The Bermuda Sun investigation also revealed that U.S. travel organizations are beginning to back away from YTB Travel, calling it "a card mill" because its agents lack bona fide travel credentials.

Cheryl Hayward-Chew, vice president of Meyer Franklin Travel, confirmed travel suppliers are beginning to refuse discounts to YTB Travel. She said people should do their research before signing up and warned that the people who are likely to make the most money are people at the top - those who buy in early.

There is heated debate on the Internet as to whether YTB Travel is a pyramid scheme - whereby the money of new investors ends up in the hands of those at the top. "

How much more water can The YTB Travel row boat take on before the call "YOU snaked my battleship" is cried out?

For More Information Contact:

Daryl D. Alex
Regional Executive
Traverus Travel and TeleVerus Cell Phones
1.800.781.3254
1.877.744.3431
225.590-770
Traverus Travel Update