YTB has raked in hundreds of millions of dollars in revenue through the use of independent marketing representatives, who are the salespeople charged with recruiting others to buy the online travel agencies, the plaintiffs say. In fact, about 75 percent of the $162 million YTB earned in 2008 was derived from the independent marketing representatives, yet a majority of the representatives -- about 80 percent -- failed to earn a profit, according to the complaint.
Those people independent marketing representatives recruit to buy the online travel agencies are referred to as referring travel agents. To buy the online travel agencies, the referring travel agents are required to pay $450 up front, then to pay $50 each month to own and operate their online travel agency, the suit states.
YTB represents to its referring travel agents that the sale of online travel agencies is a business opportunity allowing them to become travel agents, the complaint says. However, plaintiffs claim they could not act as true travel agents -- they weren't allowed to sell travel packages, process payments for travel customers, issue travel tickets or other documents to customers or receive travel commissions. Instead, they acted as agents of travel agents, only referring travel customers to YTB.
Subscribe now to get the latest news delivered right to your inbox.