FTC Enters Into $3.4 Million Settlement With Sollers College Over Job Placement Claims

Last week, the Federal Trade Commission announced that it reached a settlement with Sollers College, resolving allegations that the school “lured prospective students to enroll by falsely touting their job placement rates and that their relationships with prominent companies would lead to jobs after students graduate.”  As part of the settlement, Sollers agreed to cancel $3.4 million in student debt.  

Sollers College is a for-profit school based in New Jersey.  According to the FTC's complaint, Sollers advertised that “the vast majority of Sollers graduates are placed in jobs, including within three months of graduation.”  For example, the FTC pointed to a Facebook advertising campaign that claimed that “Sollers makes you a ready-on-day-one job candidate” and that promoted that the school had an “82% placement rate.”   

The FTC charged, however, that Sollers didn't have a reasonable basis for its job placement claims.  The FTC alleged that, “Defendants inflate the number of students they claim to ‘place’ by including anyone who does not communicate with Sollers after graduating.”  The FTC also said that Sollers didn't actually track the employment start dates for its former students, so it “lacks the information needed to support its claim that students were placed in jobs within 3 months of graduation.” 

The FTC also alleged that even though Sollers promoted that it had partnerships with specific, leading businesses that would help students get jobs, “In fact, many of the businesses featured on Sollers' website have no partnership with the school whatsoever, much less one that results in Sollers graduates getting jobs at those companies.” 

Finally, the FTC alleged that the companies encouraged students to pay for their tuition costs through income share agreements that didn't include the legally required disclosures.  

As part of the settlement, among other things, Sollers agreed to not make any misrepresentations in the future in connection with the marketing of educational products and services and to not make any claims about such products and services unless it has “Competent and Reliable Evidence that is sufficient in quality and quantity to substantiate that the representation is true."  

How is the FTC defining “Competent and Reliable Evidence” here?  It's “test, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by qualified persons, using procedures generally accepted in the profession to yield accurate and reliable results.”   

Why is this important?  One of the things that jumped out at me about this case was that it's yet another example of an FTC investigation where the agency is highlighting the importance of having highly reliable proof for one's advertising claims.  While we don't know all of the facts, it does appear from the complaint that the FTC was concerned about the advertiser cutting corners as far as substantiation was concerned, making assumptions about employment rates that just weren't supported by the actual evidence that it had.