The operator of a high school diploma scam has resolved charges with the Federal Trade Commission over misleading consumers about its educational program.

Stratford Career Institute promoted a "high school diploma" program but the company failed to meet the basic requirements set by most states, the agency alleged in an Ohio federal court complaint in February 2016. Extensive advertising by the defendant featured multiple references to a "high school diploma," the FTC said, promising an increase in earning potential, access to better jobs and promotions, and the ability to apply for higher education.

One ad stated, "With a diploma in hand, you can qualify for better jobs, faster promotions, and higher pay. Just imagine what you can achieve!" Other advertisements—found online, on television, and in print—depicted the Stratford program as equivalent to the diploma offered by a traditional high school and able to "open up doors to job and career opportunities that were closed to you before."

But Stratford failed on all of these fronts, the agency said, charging consumers up to $989 for what was essentially a worthless piece of paper. The defendant's program only requires 18 credits for completion while many states mandate "substantially more," the FTC explained, including credits in courses not offered by Stratford.

To convince consumers to sign up, the defendant purchased search terms such as "official high school diploma," "real high school diploma," and "legal high school diploma," to improve its online search rankings. But consumers were often told by prospective employers and college admissions officers that the program was not a high school equivalent, the agency said.

Pursuant to a stipulated order, Stratford is subject to a $6.5 million judgment, partially suspended upon payment of $250,000. In addition, the company must notify current students of their right to cancel participation in the program, stop efforts to collect money from those who cancel, disclose that the diploma program may not be equivalent to a high school diploma, and stop making false claims about educational programs.

To read the complaint and the order in FTC v. Stratford Career Institute, click here.

Why it matters: The FTC accused Stratford of violating Section 5 of the Federal Trade Commission Act by falsely promising that its diploma program was equivalent to a traditional high school diploma and could help students get better jobs and access to higher education.