FTC Announces $30 Million Settlement with Operator of For-Profit Post-Secondary Schools

Goodwin
Contact

Goodwin

On August 27, 2019, the Federal Trade Commission (FTC) announced it had reached a $30 million settlement with an Illinois-based operator of for-profit post-secondary schools and related subsidiaries resolving allegations that the company used lead generators who engaged in deceptive conduct to market its schools in violation of Section 5(a) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 45(a).  According to the FTC, lead generators represented to consumers that the company’s schools were associated with the military when they were not.  The lead generators also allegedly called consumers on the National Do-Not-Call Registry in violation of the FTC’s Telemarketing Sales Rule (TSR), as amended, 16 C.F.R. Part 310.  The FTC’s complaint claims that the company knew or approved of the lead generators’ acts and practices, and/or benefitted from those acts and practices.

The FTC alleges that the company was liable for the conduct of the third-party lead generators through a common enterprise theory, and advised in its press release:  “We expect companies purchasing leads to implement strong vendor management programs and stay on the right side of the law.”  Although the FTC claims that the company used over 70 different lead generators, only three of these lead generators have been the subject of FTC enforcement actions.

The Stipulated Order for Permanent Injunction and Monetary Judgment orders the defendants to pay the FTC $30 million and requires ongoing compliance and reporting for up to twenty years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Goodwin | Attorney Advertising

Written by:

Goodwin
Contact
more
less

Goodwin on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.