The Federal Trade Commission (FTC) is distributing more than $15.5 million in refunds to individuals affected by Career Step’s deceptive advertising. The online career-training company had been accused of misleading servicemembers and their spouses with false claims about job placement and career opportunities. In addition, the company allegedly influenced online reviews by offering incentives in exchange for positive feedback. Career Step has stated that it has taken steps to improve its policies in response to the allegations.
In a previous settlement announced in July, Career Step agreed to pay over $15.5 million for refunds, cancel nearly $28 million in outstanding student debts, and cease any misleading advertising tactics related to education services. The case highlighted concerns about deceptive marketing practices in the career-training industry, particularly regarding claims made to vulnerable groups such as military families.
What were the allegations against Career Step?
The FTC accused Career Step of using deceptive promotional materials that overstated job placement rates and career benefits for students. The company also allegedly misrepresented externship opportunities and partnerships with potential employers. Additionally, Career Step was found to have encouraged students to leave positive reviews in exchange for benefits, such as free program extensions, raising concerns about the authenticity of its online reputation.
How has Career Step responded to the settlement?
Career Step has stated that it has taken measures to enhance its business practices and ensure compliance with consumer protection regulations. The company emphasized its long-standing commitment to providing career training services and acknowledged changes made in recent years to strengthen internal oversight.
“In recent years, we have put in place a new, experienced leadership team and enhanced our policies and procedures to ensure our people and business practices are responsible and compliant,” Career Step stated.
The FTC’s action against Career Step adds to broader concerns about fraudulent activities affecting consumers. According to the agency, reported fraud losses in 2024 exceeded $12.5 billion, marking a 25% increase from the previous year. The growing number of deceptive practices in various industries highlights ongoing regulatory challenges in protecting consumers from misleading marketing tactics.
Regulatory scrutiny over misleading educational claims is not new. Similar cases in the past have involved other institutions that allegedly misrepresented job placement rates or potential earnings for graduates. The FTC has previously pursued legal action against companies in the online education sector, citing violations related to false advertising and deceptive financial practices. The Career Step case follows a pattern of enforcement efforts aimed at holding educational service providers accountable for their marketing claims.
Consumer protection agencies continue to monitor the career-training industry to prevent misleading advertising and deceptive recruitment tactics. Individuals seeking career advancement programs are advised to conduct thorough research before enrolling, verifying job placement rates and credential recognition. Transparency in education marketing remains a critical issue, and regulatory oversight is expected to persist in addressing fraudulent claims in the sector.
