For-profit college settles FTC charges for $30 million

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Career Education Corporation was accused of hiring deceptive marketers

Another for-profit college group has agreed to a settlement after facing charges from the Federal Trade Commission (FTC).

The agency reports Career Education Corporation (CEC) and its subsidiaries will pay a $30 million penalty to resolve charges that lead generators acting on its behalf used illegal tactics to generate leads, including falsely telling prospective students that CEC was affiliated with the U.S. military.

The report also said the company’s marketers persuaded consumers to provide information in hopes of getting jobs or benefit assistance when none were available. Both CEC and the lead generators were also charged with calling consumers on the Do Not Call (DNC) registry.

“You can’t skirt the law by outsourcing illegal conduct to your service providers,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “This case demonstrates that the FTC will seek to hold advertisers liable for the deceptive or illegal practices of their affiliates, publishers, or other lead generators.”

Illegal telemarketing

CEC operates  American InterContinental University, Inc., AIU Online, LLC, Marlin Acquisition Corporation, Colorado Technical University, Inc., and Colorado Tech., Inc. 

In agreeing to the settlement the defendants neither admit nor deny any of the allegations, except as specifically stated in the Order.

The FTC alleged that the illegal telemarketing operation began in 2012 in an effort to lure consumers to the schools and to “trick” them into providing their contact information by pretending to offer services unrelated to post-secondary education.

Allegedly posed as military recruiters

In some cases, CEC lead generators allegedly presented themselves as official U.S. military recruiters or as job-finding services. Next, they allegedly called consumers to pitch CEC schools after obtaining their phone numbers.

The FTC charges that CEC’s lead generators -- some of whom have been subject to separate FTC investigations -- violated the FTC Telemarketing Sales Rule (TSR) by calling consumers on the DNC list.

The FTC provides helpful information for students who are considering higher education opportunities, including attending for-profit schools. The agency advises consumers to determine who is actually requesting your personal information before filling out any applications or forms online. Conduct a search using the name of the school and “complaint” or “review.”

Remember that giving your Social Security number to the wrong people can lead to identity theft. Consumers interested in serving in the U.S. military should go to the Department of Defense’s site for more information.

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