Misleading ads cost university $191 million


FILE – In this Nov 24, 2009, file photo, a University of Phoenix billboard is shown in Chandler, Ariz. The University of Phoenix for-profit college and its parent company will pay $50 million and cancel $141 million in student debt to settle allegations of deceptive advertisement brought by the Federal Trade Commission. (AP Photo/Matt York, File)

The settlement with the University of Phoenix provides a mix of cash and debt cancellation to students harmed with misleading advertisements.

Apollo Education Group which is the parent company of the University of Phoenix was charged with using deceptive advertisements that falsely touted their relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross, according to a press release by the Federal Trade Commission.

“This is the largest settlement the Commission has obtained in a case against a for-profit school,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.

The settlement requires the University of Phoenix to pay $50 million in cash as well as cancel $141 million in debts owed to the school by students who were harmed by the deceptive ads.

The defendants misrepresented that companies, such as Adobe, American Red Cross, Avis, AT&T, MGM, Microsoft, Newell Rubbermaid, Sodexo, and Twitter, worked with University of Phoenix to develop its courses, according to the FTC’s complaint.

The companies were selected as part of a marketing strategy to drive prospective student interest, the FTC alleges.

The complaint further alleges that deceptive advertising and marketing materials targeted active duty servicemembers, veterans, and military spouses.

The company has been the largest recipient of Post-9/11 GI Bill benefits since the beginning of the program.

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