Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Education lead generator agrees to settle FTC charges of deceptive tactics, (Apr 28, 2016)
By Michael Menzhuber, J.D., LL.M.
The operators of Gigats.com have agreed to settle FTC charges that it claimed it was “prescreening” job applications for hiring employers when it was actually gathering the information for other purposes, including lead generation for post-secondary schools and career training programs, the agency announced today (FTC v. Expand, Inc., Case No. 6:16-cv-00714-CEM-TBS).
According to the FTC’s complaint, Expand Inc. and Ayman A. Difrawa operated Gigats.com, which gathered online job announcements and then summarized them on its website, which appeared to accept applications for the jobs. Many of the jobs were not current and, for those that were, Gigats was not authorized to collect applications or screen or interview applicants. Also, the applicant information that was collected allegedly was never sent to the employers.
The FTC further alleged that consumers who provided personal information were directed to call the defendants’ “employment specialists” who then steered the consumers toward enrolling in education programs that had paid the defendants for consumer leads. Many consumers were also transferred to the defendants’ “education advisors,” who only recommended schools and programs that had agreed to pay them for consumer leads that met their enrollment requirements.
Under a proposed stipulated order, the defendants are prohibited from:
making misrepresentations like those described in the complaint;
promoting job openings without a reasonable basis to expect that employers are currently hiring for those jobs;
transferring consumers’ personal information to third parties without clearly disclosing that it will be transferred; and
using the information covered under the order unless consumers affirmatively opt in to their services.
The proposed court order imposes a $90.2 million judgment that will be suspended upon the payment of $360,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
The enforcement action against the operators of Gigats.com is the FTC’s first such action against an education lead generator.
News: Advertising ConsumerProtection FederalTradeCommissionNews