THE MLM AND THE CARD MILL VIRUS. IS THERE A CURE? By Peter Stilphen MCC

This month I will continue to discuss the "bums" of our travel industry; the MLMs and the card mills.  I will also name a few of the more prominent "bums."  In case you are so new to this industry you don't know what an MLM/card mill is, please allow me to provide my own definition.

A Multi-Level-Marketing (MLM) agency as it applies to this industry is an accredited and legal travel agency who is primarily in the businss of selling business opportunities promising quick and great wealth to those willing to pay the high fees to join their organization.  They prey mostly upon consumers by offering great benefits and perks "while living like a travel agent."  MLMs have reward programs for consumers who bring in other consumers bordering on pyramid schemes.  Generally, the only ones making any money are the senior management while operating losses mount to the point of bursting.  When that happens, the management simply moves on and starts the process over again under a different name.

Most MLMs are also "card mills" offering the photo  ID cards as a means of acquiring additional perks by fooling many suppliers.  The cards contain the agency's IATA number and resemble the real IATAN card.  Lately, more and more card mills are offering the CLIA photo ID card instead of their own because the ease of receiving this popular and legitimate card gives them more credibility.  Many MLMs also operate through the use of free dinners, house parties, consumer travel shows, hyped email blasts and generally using any scheme their creative minds can put together.

MLMs, in a different way, take advantage of the travel suppliers by using them to load up their fam trips and cruise inaugurals for their agents, most of whom just want a cheap vacation.  This, of course, also hurts the legitimate travel agent unable to utilize the fam for gaining product knowledge.

I don't know what it is with MLMs but it sure has a cult like effect on a great many of their people much like radical religious groups.  It must have something to do with those that have a weak and/or greedy mind and they are simply taken advantage of by these people.  Fortunately, there are those MLM agents that have a sincere interest in selling travel and were probably duped into joining in the beginning.  I hope many of them are beginning to see the light and move on to the legitimate side of the travel industry.

Here a few of the most notable MLM/Card Mills.

• YTB, the present king of the MLMs and card mills was discussed in detail in my last article.  You can check on the link below for the whole story.  As usual for most of these business models lots of controversy, little truth or accuracy in their programs, lots of operating losses and a few wealthy senior management officials leaving a trail of disillusionment for many of their followers.

• WORLD VENTURES is supposedly the upstart challenger to YTB.  You can see this in their chat rooms with "my company is better than your company" mentality.  You would think that these people would get a life because they apparently don't have one now.

• VIP TRAVEL TEAM is a card mill promising consumers all the travel agent perks.  They even promise you an "authorized IATA ID card" on their website.  What about that IATAN?

• GT TRENDS is a pure MLM play with promises to get you on the path to fantastic earnings.  Enough said about this scam.

• TRAVELWIZE is a real beauty (being facetious). This organization will also sell vitamins, toothpaste, insurance and just about anything else to its faith based organization of scam card holders.

• COASTAL VACATION CLUB is another card mill promising your own IATA card.  Members of the "Bad News Bears" club.

• TRAVELOGIA is a huge card mill operation accused of ripping off churches and non-profits.

• AMERICAN TRAVEL BUREAU is one I hear lots of complaints about.  Their website looks innocent enough but their actual operation has scared a few of their members into running for the hills.

• GLOBAL INTERNATIONAL is an Orlando based card mill.  They appear to be profitable and has made attempts to enter the "legitimate" travel industry by successfully fooling the print media and one organization. In my opinion they still use heavy handed tactics to attract new affiliates and still issue cards to its 35,000 members.  They have the most lengthy IC Agreement I have ever seen.  Lots of complaints can be found on the Internet about this company.

• INTELE TRAVEL is just another one of the bums. Can't describe their activities any better.

• PRO-TRAVEL NETWORK disguises themselves as a Host Agency but in fact is another MLM and card mill.  They have overpriced programs as do most of the MLMs and card mills.  Another public company playing the common stock game for the benefit of its major stockholders.

NOW FOR A REALITY CHECK

There are nearly twice as many affiliates working under an MLM/card mill agency then there are the so called "legitimate" travel agents.

Can you really blame the suppliers for wanting to work with these agencies?  It's a numbers game with suppliers plus their first responsibility is the bottom line profit for its stockholders.  Many suppliers offer glowing testimonials on some of these "bum" websites.  Are there really two sides to the Travel agent Distribution System and should this segment of our business continue to go unchallenged?  I feel that any industry wishing to call itself professional and wanting to promote good business practices should always challenge those that believe it is only about making a buck at the expense of others.  Here are a few of my thoughts directed toward our travel industry partners.

TRAVEL SUPPLIERS must continue to educate the serious travel agent through knowledge of its products which will result in more sales to the supplier.  The idea is to create more professional agents while reducing the number of "consumer" travel agents.  The supplier should also take a good look at its travel agent "FAMs" and other perks it provides the travel agent community.  Specific criteria should be set up as to whom the supplier deems a qualified agent eliminating those that are not qualified or those just seeking a cheap vacation.  For example, a supplier may only invite an agent who has passed a certification program or who is an IATAN card holder.  Many of the card mills now offer CLIA photo ID cards because they are so easy to obtain therefore, until CLIA strengthens their requirement, I wouldn't accept them for "FAM" use.  I realize this is a "catch 22" as some of the best providers for "FAMs" are the mass market cruise lines.  Do you see the picture here?

TRAVEL ORGANIZATIONS need to have more consumer awareness programs explaining the differences between a serious and professional travel agent and a hobbyist and a consumer seeking travel agent perks.  I think organizations such as ASTA, ARTA, OSSN, NACTA and PATH should set up consumer awareness programs and include them on their websites.  I like the idea of these organizations attending the consumer travel shows with a booth to offset the "bums" that appear at these shows.  As of now the MLMs and card mills have carte blanche at these shows and are slowly entering the "legitimate" travel industry trade shows.  Consumers know nothing except that they see the
"brick and mortar" agencies disappearing, that the Internet and airlines have wiped out the travel agent community and the only way to obtain travel perks is to join one of these MLM/card mills.  We need to show them that this is far from the truth and the good guys are alive and well.

TRAVEL MEDIA should establish a policy that MLMs and card mill agency models are not invited to advertise with them.  If they really are the supporter of the serious travel professional, then lets live that way.  There should also be more privately written articles of the pros and cons of the MLM/card mills model.  This shouldn't offend their advertisers if they present it properly and fairly.

TRAVEL AGENTS who are serious about this profession whether working part-time or full-time, need to further train and educate themselves to become a travel professional.  They should conduct themselves in a professional manner whether in making a proposal to a client or attending a seminar or travel trade conference.  The "perks only" travel agent could be reduced in their numbers as more and more of the professional travel agents become better trained and more noticeable to the public and the supplier.  They should also discourage their friends from attending those private house parties and free dinners put on by the "bums."  You would be doing them a favor.

MLM and CARD MILLS will always be around.  If the "legitimate" travel agent community wants to reduce the "bums" presence and make them less prominent in the eyes of consumers and the supplier, they need to create a public awareness that there is a good side to this industry.  Otherwise we may as well call it a day and allow us to be consumed by these "bum" agencies.  I'm very concerned that CLIA is exacerbating the situation by allowing their photo ID cards to be used as a selling vehicle for the "card mills."  If you are or were a member of one of these MLM/card mill operations, I would love to hear from you too.

Please keep in mind that the comments and opinions written above are my own and not those of my company or any organization, of which, I may be a member.

NEXT MONTH'S FEATURED ARTICLE will get back to the Host Agencies as well as continuing discussions on the MLMs and the Card Mills.  I plan to discuss the MLM/card mills until the cows come home or everyone stops reading this newsletter, whichever comes first.

Comments

[Doug Bauknight]

You mentioned you wanted to hear from those of us who are involved in MLM. I appreciate and applaud you’re willingness to let us express our views of the industry. I’ve read through all your articles and can’t deny that there are those in the MLM industry who DO take unfair advantage, damaging or even ruining courtesies available to those of us who are serious about selling travel. I’ve seen many changes in industry in the 2 plus years I’ve been involved with YTB, both from us, organizations like CLIA, and cruise lines like Princess and Holland America.

Just one example I can offer is YTB will set up and offer new Agents one cruise FAM in an effort to help those experience what I believe is the best vacation money can buy. The Home Office does regulate and requires at least two full fare bookings before another FAM can be taken. (Princess and Holland America require 4 bookings.) CLIA has also changed their requirements, so that everyone is not only registered, but is now tested yearly before granting credentials. YTB has also amended new legislation in California which now requires our Agents to first book $2500 in travel before any credentials are issued from us or to be eligible to register with CLIA. I believe this legislation will eventually move across the country and believe this will help curb some of the issues both of us agree is a real sore. I’m not aware of any other MLM that is now able to offer even a “Card Mill” credential in California.

Keep your eye on YTB. It’s no mistake we are “The King of Travel MLM’s” as we have always and will continue to separate ourselves as a simple “Card Mill”. There is news on the horizon concerning our financial picture, our stock listing, (as we are currently up to date on all SEC filings) and just how dominant we are in the Travel Industry. Like it or not, not only does our model work, but we are expanding and growing at a record pace.

While I accept your views concerning what you call “bums”, I believe that companies who model themselves more like YTB and a Host Agency like yours can co-exist peacefully and with mutual respect. Personally, I make every effort to not only learn from veterans like you; but teach these principles and techniques to my growing team. I love and respect both the Network Marketing and Travel Industry, and done professionally there is nothing better.

Warm Regards

[Juliette C.]

Hi Peter,
Can you please tell us what you know about Pro Travel Network? It's fairly new which is why it's difficult to find information about it. I've gotten involved in this and I regret not researching on it. All I want is to be a home-based travel agent and book flights for a living and travel the world. The tools, training and support are lousy. It's frustrating because they're more concerned about signing up people into the business. I learned my lesson the hard way. I should have researched first where I'm putting my money into. I wish I've known that this is just an mlm and that the travel agency business is just a front.

[Robert J. del Campo]

I'm overwhelmed and grateful by all the information I'm reading here and in other sites. As a disabled vet I'm looking for a home based opportunity in the Travel Industry- what do you recommend ?

[Connie Glasgow]

am proud to be a member of YTB. I have taken courses at city college for the travel industry and have worked in a brick and mortar agency. The courses provided me with limited knowledge of the travel industry and I needed to find someone to allow me work after completion. The travel agency wanted to work me like a Hebrew slave but did not like to pay me my commission when due. I have been with YTB for 5 years and I have my own IATAN card and several certifications. I have been a consumer of travel since I was 21. Last year, I retired from a 34 year teaching career. As with anything, you have people who will abuse a system. You are abusing this system. You can not be in competition and give an unbiased critique. You are promoting your card mill and the host agencies of your associates. You want agencies to pay you to get your endorsement. You are a major scam artist because you appear to be protecting the underdog. You need to be truthful with yourself. Connie Glasgow, Connie's Travel Notebook dba YTB Travel Network

EDITORS NOTE: All I can say Connie is to use some common sense and check out the legitimate side of the travel industry. Also check out www.scam.com for some horrific YTB stories.

[Donna Rall]

I see Joystar is not on your most current list of MLM/card mills...was this removed for a reason? I was going to sign with them until I saw your article.

EDITOR's NOTE: They are back on the list as a network marketing company

[YTB]

YTB is a great company and great opportunity for anyone trying to break into the travel industry.

[Marcus Jones]

Please get your story straight about YTB. They have recently implemented a program effective on 1/1/08, wherein new Referring Travel Agents will need to sell at least $1500 in travel (not their own travel) in order to obtain their IATA card. We have been involved with YTB for 6 months and have made a significant amount of money with travel commissions. We enjoy traveling and also like to help people plan their trips. As such, we have become Disney Specialists. I recommend you do more research regarding YTB before posting such comments.

[Mike Belleggie]

Hi Peter and Billie Stilphen,

Although I am currently part of a network marketing travel company I will not name it since that is not the issue here in my mind.

With all gentleness and sincerity I believe you need to reassess your understanding of the industry you are currently dismissing.

While valid flaws can be pointed to in the companies themselves, no true argument can exist to the superiority of the network marketing model for any product and travel alike.

http://www.explorefreedommovie.com

Don't worry, this is not a company endorsement. It is an independent presentation by Charles King (Harvard graduate in Business Administration) and Tim Sales (business executive) whose backgrounds you will find to be more than impressive and credible, in which they define network marketing/MLM as the most reputable form of business.

So please go to the link, watch the "Brilliant Compensation" presentation and then consider your statements.

I have no problem with you analyzing specific MLM companies for their faults, they are frequently valid.

However, I believe you are making a grave error in dismissing the entire industry for a company's mistakes. I wish you the best and you seem so knowledgeable you certainly deserve to know what network marketing truly is.

Network marketing simply has not been done right in a specific travel company yet, until what I believe exists in one recently started. It is no mistake Charles King himself is endorsing this company in person on Sept. 7th.

Anyways God Bless you and thank you for providing good information.

[Mike Belleggie]

Oh and by the way if you watch the Brilliant Compensation video and you still see major problems with applying the Network Marketing business model to the travel industry, I would honestly like to know why.

My partners and I will not hesitate to work with/for you if what you do is truly superior. But, you'd have to prove it to us first after understanding what network marketing really is and not the attempt offered by some current companies.

[Jersey]

Is the GT Trends a legal company? is there really a GT Trends Online Travel agency?

[Eila Smit]

Hello, just one comment. I am not sure why you state that Coastal Vacation Club is a card mill, and they promise that you can get your own IATA card, but I don't believe that you have your facts straight. In fact, in order to use the vacations in the package, most of them must be booked through a travel agency. Hence, the package requires the use of travel agents to book your travel, and covers several different travel agencies. I have the package, and not once, was I told I could get my own IATA card, nor was I told that I was considered a travel agent, nor do believe I am since I do not sell travel, make travel arrangements, or even have a booking site. In fact, I believe that the travel agencies are making some money off my bookings, especially when I extend my stays, or add airfare to my accomodations. I would think that, you would believe that was a great situation for the travel agent, since its bringing the agent additional business they might not otherwise recieve.
Thanks, Eila