YTB Reps May Get Restitution as Class Action Suit Moves Forward
Federal Court Decision May Allow Restitution to Some Victims of MLM, YTB | Pyramid Scheme Alert
Federal Court Decision May Allow Restitution to Some Victims of MLM, YTB
Posted on Jul 30, 2011 in News
Home » News » Federal Court Decision May Allow Restitution to Some Victims of MLM, YTB
A three judge federal panel has overturned an earlier ruling by a federal judge, thus giving new life to a class action lawsuit against the multi-level marketing scheme, Your Travel Biz.com (YTB).
The class action lawsuit stated, “The defendant corporations have taken over half a billion dollars from their unsophisticated customers, selling them on the dream of cheap travel and million dollar pay-outs when the only way that plaintiffs and their class could make a net profit was by recruiting others to join the illegal pyramid scheme.”
The YTB scheme was prosecuted as a pyramid scheme by the California Attorney General. The Wikipedia listing for the company recounted the facts that “U.S. Securities and Exchange Commission (SEC) filings showed that the company’s three creators earned more than $2 million in 2007, a dozen salespeople earned more than $800,000, and dozens earned more than $100,000. (The California AG)’s lawsuit indicates that 45,000 sales reps earned an average of about $90 in 2007 and of their 200,000 total agents, some 125,000 earned nothing and 37,000 earned less than $39.”
YTB eventually reached a settlement with the state. Its sales plummeted along with its stock value. In 2007 the stock sold for $8.50 a share and at the end of July 2011 it sold for $.07 (seven cents) a share. Hundreds of thousands of consumers lost money in the scheme as did many thousands of investors in the scheme’s stock. Now, with this court decision, some of the salespeople may have legal recourse to recoup some of their losses.
YTB Was “Ethical” Member of the Direct Selling Association
YTB was a member of the Direct Selling Association (DSA) and its sales model passed the DSA’s “Code of Ethics” that consumers are told – by the DSA – to rely upon when evaluating MLM companies.
When it was approved by the DSA in 2007, YTB issued a press release stating, “YTB completed a one-year pending period required for full membership in the association. During this time, the Company’s marketing and business plans were reviewed to ensure full compliance with all provisions established by DSA’s Code of Ethics. YTB joins the elite ranks of DSA’s more than 220 active and pending member companies in the United States.”
Today, a search of the DSA website turns up no posts at all about YTB that are available for review by consumers.
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