A lawsuit filed by Indianas attorney general accuses test preparation company, The College Network (TCN), of "unfair and abusive" practices by selling students ineffective study guides and convincing them to pay for online academic advisors that cost up to $10,000.
Indiana is the second state to sue the Indianapolis-based company, following another complaint filed earlier this month by New Yorks attorney general. The New York lawsuit also named American Credit Exchange, a collection agency that tried to recoup students defaulted loans. Gary Eyler is the owner of both the collection agency and TCN.
Indiana has received 492 written complaints against TCN since 2011. The lawsuit filed last Thursday states that TCN tries to give customers the impression its a school even thought its not. Indiana attorney general Greg Zoeller alleges that TCN does not make it clear that students still must "apply, be admitted, take classes and graduate from an actual college or university to obtain a degree."
Indiana's complaint, which only names TCN and not Eylers collection agency, states that the company's personal loans for customers, with payments starting immediately, are at high interest rates and that relatively few people actually complete TCN's program to earn a college degree.
"The College Network has taken advantage of honest people looking to better themselves and obtain a college degree," Zoeller said in a statement. "This deceit is unconscionable, and has left hundreds of Hoosiers in debt with nothing to show for it. People should be very wary of companies like this that claim to offer short-cuts to earning a college degree."
The lawsuit seeks the cancellation of TCN's contracts, restitution for customers and civil penalties of up to $5,000 per violation. The lawsuit cites numerous alleged violations in the contract used by the company to extend credit to customers. TCN advertises relationships with Indiana State University and Purdue University. The company has denied the allegations in both the Indiana and New York lawsuits. A statement from TCN said the company will "vigorously defend against what it considers to be unfair piling on with repetitive allegations which have no merit. We are proud of our legacy. For more than 20 years, we have helped over 200,000 people pursue their educational goals."Last August, The Indianapolis Star first reported customer allegations of deception or outright fraud by TCN salesmen and high-pressure sales tactics to entice people, often nursing students, to sign for $10,000 study guide purchases. Many students that by the time they realized the program was of little value to them, the cancellation period had passed.
The Star's story also noted that Eyler and his national truck driving school were sued by the federal government in 1988 for $366 million on allegations of fraud and poor training. The school's students had a high default rate on government-backed student loans. The company later settled - for $50,000, TCN said - but went bankrupt and closed.