YTB International

YTB International, known as YTB Global Travel, Your Travel Biz or YTB, is a multi-level marketing business through owner-affiliated websites offering travels, excursions, and lodgings. The company was funded in 2001 by J. Lloyd Tomer, Scott Tomer, and Kim Sorensen. The company is currently owned by Sam Hathi.

Between 2006 and 2009 the company was the subject of several lawsuits and investigations in California, Illinois, and Rhode Island that alleged the company was a pyramid scheme and had used deceptive marketing.[1] A subsequent decline in revenues led to the company's bankruptcy in 2013, after which it was purchased by Jamraval, Inc. and reorganized under the name YTB Global Travel.

Other YTB subsidiaries include YTB Travel Network, Inc., Zamzuu, Inc., and REZconnect Technologies, Inc. (2004–2009). YTB is based in Wood River, Illinois. International subsidiaries operate in the U.S., Puerto Rico, the Bahamas, Bermuda, and Canada.[2]

History

J. Lloyd "Coach" Tomer, his son Scott Tomer, and Kim Sorensen launched YTB in 2001 in Alton, Illinois.

In 2004, YTB's founders bought interest in a related company, REZconnect Technologies, and increased their marketing budget.

Lawsuits

In August 2008 California Attorney General Jerry Brown sued the company for $25 million, alleging it to be a pyramid scheme, among other claims.[30] The Illinois Better Business Bureau and Illinois Attorney General Lisa Madigan joined Brown in investigating the company.[31][32] Brown'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.[5] On May 14, 2009, California authorities settled their suit with YTB for $1 million. As part of the settlement, YTB agreed to restructure, possibly hastening a transition to a franchise system. That same day, Madigan filed a similar suit in Illinois.[33] Brown said the agreement would end the sale of personalized websites that cost $450 to purchase and $50 per month to maintain.[14]

Around the same time, several former YTB agents filed a class-action lawsuit that alleged the company was an illegal pyramid scheme. The lawsuit says that the company "claims to sell travel services, but said company's main business is inducing others to become travel agents."[34] YTB responded by stating that it intends to "vigorously defend the case,"[34] and the case was dismissed in July 2009 on the grounds that non-residents of Illinois could not pursue the matter under Illinois law.[35] Illinois Attorney General Lisa Madigan, after her office and the Illinois Better Business Bureau, received more than 150 complaints about the company, partnered with Brown's office in his state's investigation of the company. The BBB indicated that 80% of YTB revenue came from new agent recruitment, with agents earning an average of $111 per year, almost $400 less than the initial $499 sign-up price.[36] In May 2011, it was announced that YTB had reached a settlement with the state of Illinois, paying $150,000 in restitution. No admission nor denial of guilt was made in the settlement.[37]

In 2007, YTB was also investigated for similar allegations in Rhode Island.[38]

In defense of YTB, chief executive Scott Tomer said, "We are wholly confident that our business model will withstand scrutiny, and look forward to setting the record straight in court."[39]

type	Private
foundation	2001 Alton, Illinois, U.S.
founder	J. Lloyd “Coach” Tomer, Scott Tomer and Kim Sorensen
location city	Wood River, Illinois
num employees	120 (2010)
industry	Travel
homepage	https://www.ytb.com

History

Lawsuits

External links

References