MLM Scam - An Old Hen Gets It's Feathers Ruffled

For several years now network marketing leaders in many different companies have been saying YourTravelBiz.com (YTB) is a scam. Naturally there has been a flurry of banter on this topic both pro & con. No one wants to lose a big money pirch, and by the same token no one wants to see folks get stewed. This is evident when every bird in the yard falls silent after the poultry rancher, the State Attorney General, proclaims, "MLM SCAM!"

In an August 8, 2008 news release posted on the California Attorney General's website the title boldly proclaims, "Brown Sues To Topple Online Pyramid Scheme".

So why is the Attorney General of Los Angeles, California looking to put YTB on his dinner table? In another section of the article we read, "YourTravelBiz.com and its affiliates operate an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scam. Once enrolled, members who join the pyramid scheme earn compensation for each new person they enlist, regardless of whether they sell any travel."

On the surface the statement above may seem a bit confusing. After all, isn't being paid for sponsoring part of MLM?

The FTC defines a "pyramid scheme".

The FTC's definition of a pyramid scheme goes something like this. A MLM company is a pyramid scheme if it has one or more of the following attributes:

(1) a "headhunting" fee
(2) no product sales are required to receive a performance bonus
(3) company buy back of excessive inventory
(4) not requiring that products be sold to customers.

Now look at items #1, #2, & #4 again and evaluate them against what the California Attorney General is saying YTB has been doing:

"YourTravelBiz.com and its affiliates operate an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scam. Once enrolled, members who join the pyramid scheme earn compensation for each new person they enlist, regardless of whether they sell any travel."

So, according to rule #1 YTB has been offering reps a "head hunting" (recruiting) fee. On top of that, YTB is in violation of rule #2, & #4 because it has not been requiring reps to sell the product (travel) to any customers.

So what is one to do? Should people in YTB fly the coup? That's up to them to decide. Whether you're a top-rung bird or a new chick a better question to ask may be, "Do I want to be in the YTB hen house when the ol' General comes in with his ax?"

I appreciate you,

Bill Tessore