Two weeks ago, the Federal Trade Commission (“FTC”) announced multi-million dollar settlements with the operators of two online “high schools.” According to a complaint filed by the FTC last year, Capitol Network Distance Learning Programs and Stepping Stonez Development, LLC, along with their respective principals (collectively, the “Defendants”), falsely advertised that their schools were accredited institutions but, in actuality, were “paper mills” that sold worthless diplomas.
What are the Terms of the FTC’s Deceptive Advertising Settlement?
In total, a $19.1 million judgment will be entered against the Defendants as part of the settlement. In addition, the settlement requires that Defendants turn over virtually all of their assets to satisfy the judgment, with the remainder of the judgment suspended. The Defendants are now banned from advertising or selling any academic degree or certification programs. The Defendants are also prohibited from making any future misrepresentations concerning any product or service, and cannot use testimonials in advertising.
Protect Yourself Against Deceptive Advertising Claims
Last year, we blogged about an FTC deceptive advertising action involving DeVry University. FTC scrutiny of educational services advertising continues to be very active. Accordingly, before advertising any academic services, companies in the industry should take time to consult with experienced counsel to avoid catching the watchful eye of the FTC.