Attorney General, Multilevel Marketing, and Pyramid Schemes

For those of you who don't know what Network Marketing or Multilevel Marketing is, first of all,they are pretty much two different names for the same thing. These types of business sell products or services retail on one hand, and recruit people to join their business on the other. When recruits join your company, you teach them how to build their business and you make a small commission on every thing they do thru their concern. Then they turn around and sell products or services, and recruit people to join them in their business, and on and on it goes. Each MLM/Network Marketing company has their own compensation plans and benefits.

Like Enron or Worldcom in the corporate world, there are some unscrupulous players in the Network Marketing world. When Enron or Worldcom broke in the news, did you immediately distrust every corporation in America? I have to confess it made me a little sceptical and look a little more closely. If I buy stock, it makes me do a little more research than I might have done prior to all these corporations getting found out. But aren't there frivolous lawsuits filed in this country every day by people who think their stupidity should be paid for by the large companies? (The lady who burnt her crotch with hot coffee and sued McDonald's comes to mind).

The Attorney General has decided YTB is a "pyramid scheme". For those of you who aren't old enough to remember what a pyramid scheme is, people would pay to sit in someone's livingroom and be part of a growing ladder of people paying. According to Wikipedia it is:

"A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, without any product or service being delivered".

This is definitely not Amway/Quixtar or YTB. With both you are getting products and/or services for your money. I bring up Amway/Quixtar here because they have been accused of or sued for being a pyramid scheme many times.

Look around you. Everything we do is a virtual "pyramid scheme". Corporate America is built on one of the biggest pyramid schemes yet. All the little guys on the bottom make money for the big guys on the top. Do you believe your employer is paying you even close to what he makes from your work? Heck no. When companies like P.G. & E. are crying possible bankruptcy and laying off workers, the top dog is still making $260,000 a year just in bonuses, not including salary. Multi level Marketing, or Network Marketing, gives everyone an opportunity to be the "big guy at the top." And just like in Corporate America there will always be "disgruntled" workers, especially those that don't choose to put in the time or effort (work) to build the business, but want to get handed the money.

I personally believe Bill Gates is a genius. He was sharp enough to develop the idea of going to all the computer companies and getting them to contract to use his operating systems on all their computers. I think that's brilliant! What happens? America punishes him for being so smart and makes him "fragmentalize" microsoft. Why? Because the littler guys like Linux, etc. began screaming about not getting their fair share. Why shouldn't they just have to come up with a better idea for beating the competition?

You're probably wondering what that has to do with Amway/Quixtar or YTB. The latest in the Network Marketing companies to get sued is YTB or YourTravelBiz.com by the Attorney General in our great state of California. Being a Network Marketer myself with YTB, I have to say that it never ceases to astound me the double-faced standards that exist and the frivolousness of some lawsuits. Why is it that as a company expands in huge proportions, the little guys who didn't have the idea earliest, sue? Why is it that America feels that if you make it big you should have to share it with everybody instead of the competition just finding a superior way? Isn't one of the oldest sayings about "building a better mousetrap?"

Through the years Amway/Quixtar has exponentially grown. As they have matured they have been sued by I can't even tell you how many companies, etc. Yet Amway/Quixtar now is bigger and better than ever. A very stable conglomeration of companies that has been around for over 50 yrs. They're here to stay. Like Amway, YTB is soaring like crazy on the travel scene. According to Travel Weekly, a very respected publication for the travel industry, they have gone from 36th to the 26th largest purveyor of travel from 2006 to 2007. They have one of the superlative compensation plans in the industry for Network Marketers and have one the Pinnacle Award, one of their highest honors, from Carnival Cruise Lines. They are on the New York Stock Exchange, which I admit hasn't been doing so well recently, and are members of the Direct Selling Association, all of which have standards that had to be met by YTB. Yet our great Attorney General, Jerry Brown, (who I didn't think was good for California when he was Governor) has decided to file suit.

And just like Linux and Microsoft, the traditional travel agencies, upset with YTB's growth and numbers, instead of coming up with a preferable, competitive idea, are whining about YTB, obviously loud enough to be heard by the Attorney General of California.

As a matter of policy, we do not comment on pending litigation. However, YTB believes the allegations are without merit and we plan to vigorously defend against them. That said, we'd like to emphasize that we remain proud of our business model and believe our operations are conducted in an ethical and transparent way by management of the company and our dedicated and enthusiastic sales team. We also are wholly confident that our business model will withstand scrutiny, and look forward to setting the record straight.

Additional questions regarding this situation have been asked and I believe it is important you are also informed of our answers to these questions.

Q: What steps has YTB taken in response to this complaint?

A: We are working diligently with our expert legal counsel, and this issue has the full attention of executive management.

Q: Has YTB been ordered to stop business in CA or any other state?

A: No. YTB continues to operate successfully in California, as well the rest of the U.S., Canada, Bahamas, and Bermuda.

Q: How will this impact Reps in California?

A: Currently, there is no impact on our California business operations. YTB continues to work successfully in California and throughout the U.S.

Q: As an RTA, does this lawsuit impact my ability to operate my website?

A: This lawsuit does not impact the way an RTA's travel site is operated. YTB Travel Network is still able to facilitate the booking of travel for your customers.

Q: How long will this take to be resolved?

A: Resolution for issues like this has varying time frames. Legal counsel has advised that there is no way to predict when the issue will be resolved. YTB's executive management is committed to seeking resolution as quickly as possible.

Q: How do I address rumors about YTB?

A: Unfortunately, rumors will persist. YTB stands by our business model and practices. We remain proud of the company and opportunities we have provided to many entrepreneurs throughout this country.