Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC issues revised Vocational Schools Guides, (Nov 7, 2013)

By Tobias J. Gillett, J.D., LL.M.

The FTC has retained its Vocational School Guides, which provide guidance for businesses offering vocational training to avoid engaging in deceptive marketing practices, with amendments to address specific types of misrepresentations, the agency announced today.

The Guides, first promulgated in May 1972 and amended effective October 8, 1998, are intended to advise vocational training businesses on how to avoid deceptive marketing practices. Among other practices, the Guides address misrepresentations related to the description of schools, including that a school is affiliated with the government or an employment agency; the accreditation and approval of the school; the transferability of credit to other institutions; the use of testimonial and endorsements; the qualifications of teachers; the nature of courses; the availability of employment after graduation; the availability of financial assistance; and enrollment qualifications. The Guides also address the use of deceptive diplomas or certificates and deceptive sales practices.

On July 30, 2009, the FTC published a Federal Register Notice, seeking comment on the Guides as part of its ongoing periodic review of its rules and guides. In response to the comments, the FTC revised the Guides to:

• Specifically reference the recruitment process and address misrepresentations about completion rates, dropout rates, and post-graduation employment prospects

• Address misrepresentations that completion of a program will qualify students to take a licensing exam

• Explicitly state that it is a deceptive practice to misrepresent a student’s score on an admission test, to provide inaccurate information regarding the time required to complete a course or program of instruction, or to misrepresent a student’s likelihood of success in a school or program of instruction

• Address misrepresentations regarding transfer of course credit from another school, assistance provided to students facing language or other barriers to learning, the source of funding for student loans, security policies, and crime statistics

The agency declined to adopt two other suggested changes, including requests to define the term “clearly and conspicuously” and to expand the scope of the Guides to include resident primary and secondary schools and institutions of higher education offering at least a two-year program of accredited college level studies generally acceptable for credit toward a bachelor’s degree. The FTC found the second proposal raised issues that were not in the record before it, but noted that those institutions are still covered by the prohibition on deceptive and unfair conduct in Section 5 of the FTC Act.

The FTC noted that seven of eight comments favored retaining the Guides and the remaining comment, filed by the Association of Private Sector Colleges and Universities (APSCU), would have retained the guides only for unaccredited and unlicensed vocational schools. The FTC observed that the APSCU had not identified any material inconsistencies between the Guides and the standards of any accrediting or state licensing bodies, and therefore did not show that the Guides imposed any additional burden. The Guides also merely identified practices that would violate the FTC Act, and therefore did not impose burdens not already associated with compliance with Section 5. Moreover, law enforcement actions against accredited and licensed vocational schools indicated that some of them had continued to engage in proscribed practices.

News: ConsumerProtection FederalTradeCommissionNews