ALBANY, N.Y. — New York Attorney General Eric Schneiderman has filed a lawsuit against an Indiana company after upstate New York consumers complained they paid for “ineffective” study guides.
Schneiderman is suing Indianapolis–based The College Network (TCN) and its owner, Gary Eyler, accusing them of inducing “prospective nursing students to pay thousands of dollars for ineffective study guides through false and deceptive business practices.”
Schneiderman’s office cites court papers that include affidavits from three dozen New York state consumers, including some from the Syracuse, Rochester, and Buffalo areas, who said that they were “duped by the company.”
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It’s a claim that TCN says is “not true” in a statement released through Rochester–based law firm Harris Beach PLLC. The statement has the words “not true” listed in bold-face type.
The attorney general’s suit alleges that The College Network “preyed” on as many as 2,000 New York consumers who sought to obtain associate degrees in nursing, Schneiderman’s office contended in a news release.
TCN used advertising and “high pressure sales tactics” to create the “false impression” that it was offering online nursing degrees and that it was affiliated with Excelsior College, an accredited institution based in Albany that offers such degrees, according to the attorney general’s news release.
Additional details
Court papers indicate TCN targeted licensed practical nurses and paramedics with online advertisements that “created the false impression” that it was affiliated with Excelsior College and offered associate degrees in nursing that consumers could earn “in just 18 months,” Schneiderman’s office said.
After consumers responded to the online advertisements, TCN dispatched sales representatives, referred to as “program advisors,” to consumers’ homes. The advisors “reinforced” the false impression that The College Network was affiliated with Excelsior College and engaged in “high-pressure sales pitches” to induce consumers to sign up for TCN’s “program.”
However, the program consisted of “little more” than a series of study guides that many consumers found “difficult to understand” and that, “contrary to the company’s representations, did not prepare them for the required exams they needed pass in order to get course credit.”
The court papers allege that TCN charged consumers about $500 for each study guide and “required” consumers to purchase upfront guides for every course they would need to earn their degree from Excelsior College.
In many cases, the total cost of the network’s program exceeded $10,000, which “forced” most consumers to accept the financing that TCN offered, the attorney general alleges. In many cases, TCN “did not disclose” that the loans were being provided by a credit union, not TCN.
The suit also names Tennessee–based Southeast Financial Credit Union, which partnered with TCN to provide financing to consumers and American Credit Exchange, a collection agency that Eyler operates that attempted to collect from consumers who defaulted on their loans.
TCN statement
TCN provides study guides and learning modules that “numerous professional” educators from colleges and universities nationwide have written. The company has been “successfully” delivering “quality products for our thousands of customers for more than 20 years,” according to the TCN statement.
Schneiderman’s “bloviating” statements are the “real” false advertising in this case, the statement went on to say. The law is “clear” and TCN has done “nothing unlawful,” it said.
TCN said it sought “multiple independent” opinions from experts in the field of advertising and marketing to review the advertising, and provided the “uncontradicted” findings to Schneiderman “weeks ago.” And, the experts concluded that Schneiderman’s claims are “not supported by fact.”
For example, Michael Pepe, a professor at Siena College near Albany, said the following in a sworn affidavit.
“The TCN advertising, contracting provisions, promotional and educational materials are consistent with typical industry materials and industry guidelines. The TCN materials are not misleading, improper or deceptive in a material way, and there is sufficient documentary evidence to conclude that TCN was not attempting to mislead the reasonable consumer or act in a deceptive manner,” according to the TCN statement.
TCN also said the conduct of “certain individuals” that Schneiderman employs has left it “shocked.”The conduct became “so egregious” that it reported the actions to the New York State Joint Commission on Public Ethics (JCOPE).
The TCN statement didn’t elaborate on the conduct it is complaining about.
TCN “looks forward to vigorously defending this case in court” and JCOPE’s “thorough investigation of our ethics complaints” concerning Schneiderman’s office, according to the statement.
Contact Reinhardt at ereinhardt@cnybj.com
