Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC, VA sign agreement to protect service members using military education benefits, (Nov 12, 2015)

By Linda O’Brien, J.D., LL.M.

The FTC and the U.S. Department of Veterans Affairs (VA) have signed a Memorandum of Agreement to continue their ongoing efforts to stop fraudulent and deceptive practices targeted at U.S. service members, veterans, and dependents who use military education benefits, the agency announced today.

Purpose. The agreement is designed to enhance cooperation between the FTC and the VA in investigating and taking action against institutions that target service members with unfair or deceptive advertising or enrollment practices. It outlines the terms under which the VA can refer potential violations to the FTC.

Procedures. Under the terms of the agreement, the VA can request that the FTC conduct an investigation of an institution approved for the enrollment of eligible veterans. In its referral, the VA is to provide a written explanation of its basis for believing that the institution is utilizing advertising, sales, or enrollment practices that are unfair or deceptive. In determining whether to accept the referral, the FTC can consider: (1) the type of violations alleged; (2) whether the violations allegedly occurred on a regular and ongoing basis; (3) the number of consumers affected; and (4) the likelihood of preventing future unlawful conduct.

The agreement also provides that, during the FTC’s consideration of the referral and any subsequent investigation, VA staff will be available to respond to information requests from the FTC as needed and will provide access to advertising, sales, and enrollment materials that the VA obtained from the referred institution. The FTC will provide an analysis at the conclusion of its investigation. The agreement clarifies that the FTC staff analysis is intended for use by the VA in rendering its judgment under 38 U.S.C. §3696(a) and not for the FTC to determine whether the institution violated Section 5 of the FTC Act.

The FTC advises service members to watch out for any for-profit schools that may stretch the truth to encourage enrollment, either by exerting pressure on service members to sign up for unnecessary courses or to take out loans that might be a challenge to pay off. Students interested in pursuing a higher education are encouraged to check out the FTC’s updated guidance, “Choosing a College: Questions to Ask.”

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