Markets Wired

The Federal Trade Commission has filed charges against two operators of online “high schools” that claim to be legitimate but are alleged to be little more than diploma mills charging anywhere from $135 to $349 for a worthless certificate.

In its federal court complaints, the FTC alleges that these two separate operations mislead consumers about their legitimacy, including their association with recognized high school equivalency programs. They use names like West Madison Falls High School, Columbia Northern High School, Stafford High School and many others.

“The defendants took advantage of people who wanted a high school diploma,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If a company says you can get a diploma in no time at all or by simply taking an online test, it’s almost certainly a scam.”

Documents filed by the FTC in both cases allege that the operations bought a number of website names designed to look like legitimate online high schools and use deceptive metatags with terms like “GED” and “GED online” to bring the bogus sites higher in search rankings. Once consumers arrive at the schools’ sites, they are met with messages that imply that the diplomas offered by the defendants are equivalent to an actual high school diploma.

According to the FTC documents, the “courses” amount to four untimed, unmonitored multiple-choice tests, requiring that students answer 70 percent of each test correctly. For some “high schools,” when students fail to meet that standard, they are redirected to the test once more, and this time, the correct answers are highlighted for students to change their answers. Other “high schools” provide students with an online “study guide” that, when used, also highlights the correct answer for students to select.

Upon completing the tests, the documents allege that consumers are then directed to a set of menus to judge their “life experiences,” where selecting that one knows how to “Balance [a] Checkbook” translates as credit for accounting coursework. If a consumer says they “Listen to Music Occasionally,” he or she may be given credit for a music appreciation course.

The FTC’s filings in both cases point to numerous consumers who sought to use the diplomas they received from the defendants to get jobs, apply for college and even join the military, only to find out that their diplomas were not recognized.

The defendants mislead consumers with statements about membership in accrediting bodies that do not exist and are creations of the defendants themselves, according to the FTC’s complaints. The Capitol Network defendants also mislead consumers by claiming to be certified by or compliant with Department of Defense standardization programs for online education.

The FTC’s filings ask the court to put in place a temporary restraining order halting the operations and freezing the assets of the two separate sets of defendants: Stepping Stonez Development, LLC, also doing business as American Certification Specialists, Intentional Growth, LLC, and Stephen J Remley; and Capitol Network Distance Learning Programs, LLC, Capitol Network Digital Licensing Programs, LLC, Veritas Sales, Inc., Nicholas A. Pollicino, Anthony J. Clavien and Adam F. Pollicino.

The FTC has also produced a new consumer education article with advice on what to watch out for when it comes to online high schools.

The Commission votes authorizing the staff to file the complaints and seeking temporary and preliminary relief were 4-0. The complaints were filed in the U.S. District Court for the District of Arizona.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The cases will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.