Madigan, states announce settlement over deceptive exploitation of
veterans' education benefits
Attorneys
general: GIBill.com deceived service members, veterans seeking
higher education
Send a link to a friend
[June 28, 2012]
WASHINGTON
-- Illinois
Attorney General Lisa Madigan joined several of her
counterparts, U.S. senators and federal officials yesterday to
announce a settlement with a California-based company over
allegations that its website, www.GIBill.com, deceptively steered
U.S. service members and veterans to use their federal education
benefits with the company's preferred clients in the for-profit
schools industry.
|
Madigan and attorneys general in 19 states alleged QuinStreet
fraudulently marketed www.GIBill.com to military service members as
a website that was operated or endorsed by the U.S. government or
military. Madigan said the site listed "eligible GI Bill schools,"
which misled visitors to believe the posted schools were the ones at
which veterans' benefits could be used. In fact, the list consisted
only of QuinStreet clients, which were primarily for-profit
colleges. "This company deceptively promoted its website as an
unbiased source of information for service members seeking to
further their education and career prospects," Madigan said. "But in
reality, the site was just a front to steer veterans to for-profit
schools intent on siphoning veterans' GI Bill benefits rather than
providing the men and women who serve our country with a legitimate
education."
As a result of the settlement, Madigan said that the owner of the
website, QuinStreet Inc., will pay $2.5 million to the states and
turn over its website to the U.S. Department of Veterans Affairs to
establish a legitimate, independent source of guidance for service
members and veterans seeking help in applying their benefits to
higher education.
Speaking at the National Press Club in Washington, D.C., Madigan
made the announcement Wednesday with several of her counterparts;
U.S. Sens. Richard Blumenthal, Barbara Boxer, Dick Durbin and Tom
Harkin; as well as Holly Petraeus, assistant director for
Servicemember Affairs at the Consumer Financial Protection Bureau;
and Scott Gould, deputy secretary of the Department of Veterans
Affairs.
"I applaud the state attorneys general for the settlement
announced (Wednesday) to protect service members from misleading and
deceptive websites that target their GI Bill benefits. These new
consumer protections will help ensure that veterans looking online
to learn more about the GI Bill will find accurate information about
the benefits they have earned through their service and sacrifices
for our country," Petraeus said.
"At VA, it is part of our mission to support and encourage
veterans as they seek higher education. We must ensure that they are
adequately and accurately informed about their education options
throughout the process," Gould said. "Predatory, aggressive and
deceptive marketing directly inhibits our ability to ensure they
understand those options. This settlement is a positive step towards
ensuring our veterans have the education opportunities they've
earned. VA stands with the states' attorneys general, and all
Americans, in protecting veterans from predatory, exploitive or
deceptive marketing of any service."
Many for-profit colleges have increasingly recruited veterans
since Congress' enactment of the Post 9/11 GI Bill in 2008, which
made billions of dollars in education benefits available to service
members. According to a February 2011 General Accounting Office
report, $9 billion in educational benefits was provided to service
members and veterans in fiscal 2010. A December 2010 survey of 20
for-profit colleges by the U.S. Senate Committee on Health,
Education, Labor and Pensions showed that the colleges' revenue from
military educational benefits increased from $66.6 million in 2006
to a projected $521.2 million in 2010 -- a 683 percent increase.
[to top of second column] |
Madigan has been an outspoken critic of the for-profit schools
industry. Last month, Madigan and her counterparts sent a letter to
congressional leaders urging them to close the loophole in the
Higher Education Act that has allowed many for-profit schools to
exploit the education benefits available to American service
members, veterans and their families. Earlier this year, she also
filed a lawsuit against the national, for-profit Westwood College
for engaging in deceptive practices that left Chicago-area students
with up to $70,000 each in debt for degrees that failed to qualify
them for careers in criminal justice. According to reports, Westwood
College collected $28 million in GI Bill benefits from 2009 to 2011.
Besides turning over the GIBill.com website to the U.S.
Department of Veterans Affairs to operate, the settlement announced
Wednesday includes these additional terms:
-
Social media
accounts associated with GIBill.com must be shut down.
-
Other QuinStreet
military-related sites must contain clear and conspicuous
disclosures to clarify the site is not owned or operated by the
U.S. government.
-
QuinStreet must
disclose that schools listed on its other sites are not the only
schools that accept GI Bill benefits and must provide links to
the Veterans Affairs page for a complete list.
-
Other QuinStreet
education-related websites must clarify that schools responsive
to a consumer's search are advertisers or that they pay to
appear on the site.
-
QuinStreet must
cease claims on its other websites that information presented is
"neutral" or "unbiased" or that schools are "top" or "best"
unless the information comes from an independent source.
-
Other QuinStreet
education-related sites must clearly explain the sites are owned
by QuinStreet and must contain identifying information about the
company and its business operations.
Assistant Attorneys General Michele A. Casey and Akeela White
handled the case for Madigan's Consumer Fraud Bureau.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan] |