In California, they agreed to pay $1 million in response to then-Attorney General Jerry Brown's assertion that they were operating an endless chain scheme. Yesterday, the St. Louis Business Journal reported that they did the same thing for Illinois, which charged them with deceptive business practices.
YTB/Zam Zuu has always operated on the fringe of legality, with many of their representatives stepping over the line, and have essentially admitted so in their SEC filings when they state that they believe their operation is operating legally, but cannot guarantee it.
Like California, there are a series of requirements imposed on YTB/Zam Zuu to go along with the $150,000 fine. From the St. Louis Business Journal:
Other parts of the decree calls for YTB to:
- make certain disclosures, including information regarding recent compensation,
- if representations are made regarding income, compensation or lifestyle enjoyed by a website owner or website distributor;
- clearly and conspicuously disclose all terms and conditions associated with all products and services offered for sale on all of its websites, including cost, contract terms, automatic renewal provisions, and how to cancel plans or other contracts.
- provide the Illinois attorney general's office quarterly copies of all marketing, promotional and informational materials disseminated to consumers, potential customers, reps, website owners and website distributors, and samples of all agreements between those entities and the company.
The article also refers to YTB/Zam Zuu as a "a one-time multilevel marketer of travel agent Web sites" which indicates, as we have shown here, that YTB/Zam Zuu is indeed making a decided shift away from travel. Additionally, the article states that YTB/Zam Zuu had changed its business model (presumably the one that was registered with every Attorney General and was guaranteed to never change due to a Bill of Rights) several times in order to come into compliance with the settlement.
