This week, the office for New York Attorney General Eric Schneiderman (the “AG”) announced a settlement with test prep company Xpeed Learning Academy (“Xpeed”) in connection with its investigation into claims of deceptive advertising. As part of the settlement, Xpeed will refund consumers $60,000, cease its deceptive advertising, and make changes to its refund policy.

What were some of Xpeed’s alleged deceptive advertising practices that initiated the AG’s investigation?

According to the AG, Xpeed ran afoul of New York’s prohibitions against deceptive advertising by:

  • Targeting Chinese-speaking parents with Chinese-language advertisements, promising that its summer program would boost children’s academic levels by three grade levels in eight weeks;
  • Promising to transform poor-performing students into top students;
  • Promising to enable children to complete high school by the age of 10; and
  • Promising to turn all children into prodigies using a special new learning methodology and one-on-one tutoring.

Parents typically paid between $3,000 and $8,000 for the summer program. The AG’s investigation found that, despite the aforementioned claims, Xpeed was unable to substantiate any of the results promised in its advertisements. In addition, parents often lodged complaints of having lost their money, oftentimes without the ability to receive a refund from Xpeed.

Protect Yourself from Deceptive Advertising-Related Scrutiny

We continue to report on the aggressive enforcement of deceptive advertising laws on a state and federal level. There is a steady stream of state attorney general and FTC-related actions, judgments and settlements of which we consistently blog. Accordingly, it is critical for marketers to work closely with experienced counsel to ensure that marketing campaigns which tout the benefits of products/services comply with applicable state and federal advertising laws, as well as general industry standards.