Career Step to Pay $43.5 Million for Misleading Advertising Practices

Career Step, LLC, an online career-training provider, has agreed to pay $43.5 million in cash and debt cancellation to the Federal Trade Commission (“FTC”) for deceptive advertising practices aimed at servicemembers and their families. The settlement includes $27.8 million in student debt cancellation and $15.7 million in refunds for consumers misled by false job placement and employer partnerships claims. The FTC’s investigation revealed that Career Step employed misleading advertising tactics, falsely claiming high employment outcomes and partnerships with well-known companies in the healthcare sector. Since at least 2019, the company has marketed its programs on various platforms, including social media and military-focused publications, employing sales representatives and AI technology to attract potential students. The advertising promoted unrealistic job placement promises, externships, and inflated claims about the duration and effectiveness of its programs. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stressed the significance of this action, stating that service members and their families deserve accurate information when utilizing their benefits for education. He emphasized that deceptive practices undermine the hard work and sacrifices these individuals make. According to the FTC's complaint, Career Step’s representatives falsely assured consumers that the company would assist them in finding employment. While the company claimed to have a dedicated “career placement team,” it offered only limited support, such as resume help and links to job postings available online. The complaint also highlighted that the company's claims regarding employment rates were based on an optional survey sent to program completers, a process that yielded minimal responses, resulting in skewed statistics.