Education Company will Settle in FTC Deceptive Marketing Complaint
An educational services company is settling a Federal Trade Commission (FTC) complaint that it deceptively marketed its programs to parents.
WordStart claimed that its programs would improve students' scores in school, on IQ tests and on college entrance exams, but those claims could not be substantiated. The company also violated the Telemarketing Sales Rule (TSR) when it repeatedly called numbers that were on the National Do Not Call Registry.
According to the FTC complaint, the company made false and unsubstantiated claims that by using WordStart programs for 20 hours, students were guaranteed to improve by at least one GPA point, SAT scores by at least 200 points, ACT scores by at least four points, and GRE and GMAT scores by at least 100 points. The company targeted parents of school-age children through telemarketing, their website and an infomercial featuring Jeopardy host Alex Trebek.
The programs cost between $15 and $300.
In addition, the company allegedly repeatedly called consumers whose phone numbers are listed on the National Do Not Call Registry, refused to honor requests to stop calling, and failed to connect a consumer to a sales representative within two seconds after they answered the phone, as required by the TSR.
The stipulated final order prohibits the defendants from misrepresenting the benefits, performance, or efficacy of their educational goods or services. It also imposes an $18.7 million judgment that will be suspended when the defendants have paid $147,400. The full judgment will become due immediately if they are found to have misrepresented their financial condition.