International Law

Fraud News For Tuesday

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Optree's blog has an nice analysis of the DSA's statement regarding YBT's membership and it being sued by the AG of California.

"The DSA has finally made a statement regarding the status of one of their companies that is currently in trouble, namely, YTB, the online travel company and DSA member currently being sued in 2 states for over $100 million dollars for fraud as well as the California DA. Recently, there have been several DSA member companies that have run into some major problems, making us wonder what the purpose of the DSA really is. Their requirements are so strict, yet recently DSA member companies have closed, (Weekenders) or been sued (YTB). Finally, the DSA, who has been awfully quiet lately, has released a statement"

So what did the DSA say?  Read the Optree blog to find out.  (No, the DSA did not immediately suspend YTB's membership and fees are the reason why.)

Ed Dickson, writing at is Fraud, Phishing, and Financial Misdeed writes about the high cost of fraud.

"U.S. organizations lose about 7 percent of their revenues to fraud, according to the Association of Certified Fraud Examiners. When compared to the projected U.S. Gross Domestic Product for 2008 -- 7 percent equates to $994 billion.

In their just released Report to the Nation on Occupational Fraud and Abuse, the average case cost a business $175,000. In a quarter of 959 cases used to compile the study, the loss was $1 million or more. The most costly type of fraud was financial statement fraud -- more commonly known as cooking the books -- which cost organizations an average of $2 million.

Not surprisingly, smaller businesses suffered the greatest losses. I say not surprisingly, because smaller businesses normally can't afford dedicated resources to detect and prevent fraud. For small businesses, the average case studied cost about $200,000."

Read the entire article, because Ed has some very good advice about to easily detect and defeat attempts to defraud your company.

Finally, Tracy Coenen writing at Pink Truth, has a great article on 30 misrepresentations typically made by network marketers, put together by Dr. Jon Taylor, here is a sample.

"Presented as a great "income opportunity," with huge incomes reported for many.

 Recruiting MLM's nearly always lead to certain loss for new recruits. A few are at the top of a pyramid of participants are enriched at the expense of a multitude of downline participants, about 99% of whom lose money.

 "Everyone can do this" - and earn a good income.

 Holding up top earners as examples of what others can do is deceptive. It is unfair to sell tickets when - for nearly everyone - the ship has left the port"

Read the whole article!

Full post as published by Misleading Advertising Law on August 13, 2008 (boomark / email).