A lawsuit filed Thursday in Albany County (N.Y.) Supreme Court accuses The College Network and its owner of scamming more than 2,000 New York residents who wanted to become nurses by selling "ineffective" study guides and convincing them to pay for online academic advisors that cost up to $10,000.
New York Attorney General Eric Schneidermans office filed the lawsuit, stating that students took the required exams through the unaffiliated Excelsior College and that Gary Eyler, owner of TCN, also runs American Credit Exchange, a collection agency that allegedly tried to recoup students defaulted loans.
Both the collection agency and Southeast Financial Credit Union also are named in the lawsuit. Southeast Financial Credit Union provided personal loans to TCN customers for up to $10,000, according to the complaint.
TCN - a test preparation company that operates out of an Indianapolis office and advertises relationships with Indiana State University and Purdue University - also must make changes to its business practices after the court granted a temporary injunction.
Excelsior College is an accredited college in Albany, N.Y. Students were told that they could get a nursing degree in 18 months. The majority of students involved in the alleged scam failed to pass the test and the academic advisers had not expertise in the subject matter, according to the lawsuit.
TCN issued a statement accusing Schneiderman and his staff of making false claims. According to the statement, the conduct of Schneiderman's staff while investigating TCN was so egregious that TCN filed a complaint with the New York Joint Commission on Public Ethics.
"Mr. Schneiderman's bloviating statements are the real false advertising in this case. The law is clear and we have done nothing unlawful," said the statement issued by law firm Harris Beach, on behalf of TCN. In public records and interviews, an investigation last year found more than 200 consumer complaints about TCN filed to the Indiana attorney general since 2013, plus nearly 100 in Florida, Ohio and Texas.
They allege deception or outright fraud by salesmen and high-pressure sales tactics to convince people to sign for thousands of dollars in upfront purchases financed by long-term personal loans.