FTC settlements protect consumers

By Katie Ritchie


Every month it seems like news breaks of another big scam or data breach. This week I wanted to focus on some positive news.

First is the record $191 million settlement from the University of Phoenix and its parent company Apollo Education Group. The FTC charged that the for-profit school used deceptive advertising. Their marketing team misrepresented relationships with companies like Microsoft, Twitter, AT&T and more. The companies featured in ads didn’t help develop curriculum or provide job opportunities.

Worse, allegedly deceptive ads targeted active duty service members, veterans, and military spouses. The $191 million will be delivered in the form of $50 million paid to the FTC to be refunded to consumers. The remaining $141 million will be distributed to former students through loan forgiveness. Students who will receive the refunds are those who enrolled when deceptive ads were in use. The settlement won’t affect student borrowers’ private or federal loan obligations.

The 2nd settlement was with Elite IT Partners Inc. and its President/CEO James Martinos. Elite IT had telemarketers target consumers who needed help recovering passwords. These callers claimed affiliation with Microsoft or Yahoo. They would pressure consumers to give them access to their computers. The telemarketers would then run fake ‘diagnostic’ tests. The telemarketers offered expensive, unnecessary repairs and software to fix imaginary issues. A $13.5 million judgment was imposed against Martinos and Elite IT. They claimed they don’t have it. Martinos will pay $173,500 and turnover other assets. If Martinos and the company misrepresented assets, they will pay the full amount. They are also permanently prohibited from offering/marketing tech support products or services, misrepresenting refund/cancellation policies, and claiming affiliation with other companies.