BBB says complaints about YTB abound
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August 7, 2008 - 4:38PM
By DENNIS GRUBAUGH
The Telegraph
WOOD RIVER - The woes of the YTB travel operation widened Thursday when the Better Business Bureau went on record with complaints it says it has received about the company in at least 31 states.
"We've been monitoring the company for a little while. In 2008, the complaints really exploded," said Scott C. Thomas, a trade practice consultant with the Better Business Bureau of Eastern Missouri and Southern Illinois.
BBB was preparing a report on the Wood River-based company even as action was being mounted by the California Attorney General's Office, which on Monday filed suit against Your TravelBiz.com, its founder and certain executive officers.
The suit contends that YTB, which is set up to sell online travel agencies, is essentially nothing more than a pyramid scheme that centers more on recruitment of new members who pay more than $1,000 per year for the opportunity to own and operate an online travel agency.
Those travel agencies are "essentially worthless," the suit says. Of more than 200,000 consumers who purchased or maintained the Web sites during 2007, 62 percent failed to earn a single travel commission - "not even on their own personal travel," the suit says.
The BBB allegations were forwarded to a spokeswoman for YTB with a request by The Telegraph for comment. No comment was received by press time Thursday.
Thomas said the BBB complaints mirror those of California's attorney general.
A lot of the complaints came from agents who did not think the YTB package lived up to promises, did not pay as high a commission as expected and was more about recruitment of other members than anything.
"Once they realized it, (the agents) tried to cancel their membership, and the company would tell them it was past the five-day point of cancellation," Thomas said.
With great fanfare, YTB moved its headquarters a couple of years ago from a small location in Edwardsville to the former Kmart location at 1901 E. Edwardsville Road in Wood River, where it has plans to spend millions of dollars on renovation - much of it already done.
The increase in complaints seems to have followed the growth of the company, Thomas said.
In the past 36 months, the BBB has received more than 90 complaints and reports about YTB, more than 40 of which were received in 2008. The firm is considered to have an "unsatisfactory record" because of unresolved issues, he said. The first complaint was noted in 2002.
BBB corresponded with the company in 2007 and sent another letter to company executives in late 2007 or early 2008 and has not heard back since that time, Thomas said.
Thomas said the company has addressed individually some of the complaints forwarded to it by BBB, but has not addressed specific questions that the BBB has about the business' structure, including its financials and business affiliations.
YTB has two main subsidiaries: YourTravelBiz.com, which, through a network of sales representatives, sells travel agencies and signs up other representatives, and YTB Travel Network, which manages sales for YTB's 139,000 referring travel agents, commonly called RTAs.
Typical of the complaints, Thomas said, was a story from a Fallbrook, Calif., woman who complained that after a daylong seminar, she purchased a Web site from YTB for $499 in order to become an online travel agent. She said she thought this would be a good way to make money from home and obtain travel discounts for personal travel.
The woman said she needed to book $1,200 a month through her Web site in order to be eligible for personal discounts, but everyone that she told about her site said that they "did some research and found that they could book travel more cheaply elsewhere," the BBB said.
The woman told the BBB that the International Air Transport Association Network rescinded its affiliation with YTB, which had been a main way for agents to obtain travel discounts. The BBB assisted her in obtaining a refund.
BBB said the Transport Network severed its relationship with YTB over "failure to maintain standards of accreditation."
According to BBB, the Transport Network released an official statement indicating that that YTB was terminated for "violating the standards which provide that ‘IATA numeric codes shall not be lent, subcontracted, or hired to a third party.'" The Transport Network found that the referring travel agents recruited by YTB were "third parties over whom YTB had no control."
YTB disputed the Transport Network actions, but upon review, the actions were upheld, the BBB said.
In another example, a Copiague, N.Y., woman told the BBB that she attended a YTB presentation and was told repeatedly she could make 60 percent commission on everything she booked through the Web site.
However, once she signed up, she found out the commission actually was 60 percent of what YTB gets, only about $3 per airline ticket. She said that she tried to cancel, but the firm refused, citing the five-day cancellation period - that, despite the fact that she did not receive her packet informing her of the cancellation policy until after the expiration period.
dennis_grubaugh@thetelegraph.com
BBB WEIGHS IN ON ‘MULTI-LEVEL MARKETING'
The BBB and the Federal Trade Commission offer the following advice concerning multi-level marketing plans:
-- Avoid any plan that includes earnings primarily based on commissions for recruiting additional distributors. It may be an illegal pyramid.
-- Be cautious of plans that claim you will make money through the commissions on sales made by new distributors you recruit, rather than through sales you make yourself.
-- Beware of plans that claim to sell miracle products or promise enormous earnings.
If you decide to become a distributor, you are legally responsible for the claims you make about the company, its product, earnings claims and the business opportunities it offers. That applies even if you're repeating claims you read in a company brochure or advertising flier.
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