Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Owners of Florida diploma mills face stiff fines, prohibition on further deception in settlement of FTC charges, (Jan 30, 2015)

By Dan Selcke, J.D.

The principal owners of two Florida-based online “diploma mills” settled charges that they deceived consumers into enrolling in their programs, according to an FTC announcement.

Maria Garcia, Alexander Wolfram, and IDM Services were charged with falsely claiming that, through their programs, consumers could obtain “official” high school diplomas that could be used to enroll in college, apply for jobs, and “receive the recognition [they] aspire for in life.” Consumers received their diplomas after paying between $200 and $300 and passing an online, multiple-choice test. The defendants also fabricated an accrediting organization to give their claims the appearance of legitimacy, the FTC alleged.

In addition to shutting down their operations, the terms of the settlement prohibit the defendants from making misrepresentations in connection with the marketing of any other product or service. The orders, filed earlier this month, also imposed a judgment of more than $11.1 million against the defendants and the corporate relief defendants, although they will be partially suspended based on the defendants’ inability to pay.

Meanwhile, the FTC is seeking separate default judgments against Diversified Educational Resources (DER) LLC and Motivational Management & Development Services (MMDS), Ltd., two other business operated by the defendants.

News: ConsumerProtection FederalTradeCommissionNews