Online career-training company, Career Step, LLC has been ordered to pay $43.5 million in debt cancellation and cash to resolve charges brought by the Federal Trade Commission that alleged the company lured consumers, specifically servicemembers and their families, with deceptive ads that falsely touted inflated employment outcomes, job placement, and partnerships with prominent companies.
Career Step will pay $27.8 million in debt cancellation and $15.7 million in cash that will be used to provide redress to consumers who were harmed by its deceptive advertising.
“Servicemembers and their families make sacrifices every day to protect our freedoms,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We owe it to them to make sure that when they look to use their hard-earned benefits to further their education, they get facts and not fantasy.”
According to the FTC’s complaint, Georgia-based company Career Step (also doing business as CareerStep, CareerCert, and Carrus), promotes career training and certification programs for jobs in the healthcare industry, targeting servicemembers and their spouses. The complaint states that since at least 2019, Career Step has lured servicemembers with deceptive advertising on social media and on its website, where it markets its programs, using sales representatives and AI technology to persuade consumers to enroll. The company has also marketed its services through military-focused publications, such as Military.com, and through events sponsored by the military, including job fairs. Specifically, Career Step has made false claims about job placement and outcomes, externships, hiring partnerships, and the duration of its programs, with the help of deceptive incentivized reviews it uses to promote its services.
The FTC’s complaint says that Career Step representatives have falsely promised to find jobs for consumers. For example, Career Step representatives have claimed that the “career placement team” will step in and find consumers the “perfect job.” In reality, Career Step does not provide any job placement. Career Step’s job search assistance is limited to help with resume-drafting or emailing links to job postings generally available on the internet.
The complaint says the company has also represented that “most learners” and “more than 80% of its graduates,” or program-completers, are employed in their field of study. Career Step’s employment outcome claims are based entirely on an optional survey sent only to consumers who have completed their program. But most participants never complete their program at all and never even receive a survey. Of the consumers that do receive a survey, most never respond. For instance, out of the 9,330 enrollees and 2,126 program-completers from a 2020 survey, only 5% of enrollees or 24% of program-completers completed the survey, representing a small pool of consumers.
Career Step’s website has claimed falsely that it has partnerships with leading businesses in the healthcare industry to provide jobs for its graduates, according to the complaint. Career Step prominently featured the logos of well-known “Hiring Partners” like CVS and Walgreens on its homepage, and the company’s sales representatives have told consumers, “We have over 50,000 partnerships so we’ll help you find some place to work.” In reality, Career Step’s agreements, including with companies like CVS and Walgreens, have nothing to do with job placement after graduation.
Career Step “Our Trusted Employer Network” homepage example
The FTC also charged that Career Step has falsely told students that it would place them in an externship as part of its program. But the complaint notes that less than 10 percent of students in externship-required programs were ever placed in an externship. Without an externship, those consumers have been unable to complete their programs, wasting all the time and money they had already invested with Career Step.
The company has also falsely promised that students would complete their program in four months or less even though the vast majority of Career Step students never complete their programs. Even of those who do complete them, most take much longer than four months because of roadblocks from the company. For example, consumers report frequent issues with the website and difficulty getting any response from Career Step representatives. And because the company frequently fails to place consumers in the externships required to complete their programs, many Career Step students have seen their programs expire before they could complete them or have been forced to pay for extensions on their programs, which can cost as much as $999.
Finally, Career Step conducted a deceptive incentivized review program to get consumers to post reviews on the BBB website, Google, and Trustpilot, the complaint notes. The company offered students a free extension—up to three months of “complimentary” extra time on their programs—for leaving a review on each of the three specified sites. Students were asked to screenshot their review or copy the link and send it back to Career Step as proof. In many cases, these reviews falsely appear to reflect the opinions and experiences of ordinary, uncompensated Career Step students.
The settlement, which must be approved by a federal judge before it can go into effect, requires Career Step to pay $15.7 million, which the FTC will use for consumer redress. The company must also cancel approximately $27.8 million in debts owed to Career Step by current or former students who enrolled between February 2020 and February 2023. The stipulated order also prohibits Career Step from deceptively advertising any educational product or service.
Specifically, Career Step cannot misrepresent:
- employment, hiring, or career prospects;
- the number or percentage of consumers who obtain employment;
- whether any individual was employed, hired, or obtained a job as a result of Career Step’s educational products or services;
- partnerships with any companies or employers;
- career services;
- its externship program;
- the typical or expected duration of a program;
- the total costs or terms of the educational program or service;
- the objectivity or impartiality of any content; or
- any fact material to consumers concerning any good or service.
Finally, Career Step must notify each third-party platform or website displaying a review written by a consumer to whom Career Step provided free services in exchange for the review about the FTC’s action against the company. The notice also must list all such reviews with enough information to allow the website or platform to easily identify them, and Career Step must inform the website or platform about the FTC order and request that the website or platform remove those reviews as soon as possible.
The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0. The complaint and stipulated final order will be filed in the U.S. District Court for the Northern District of Georgia. Commissioners Melissa Holyoak and Andrew N. Ferguson issued concurring statements.
The staff attorneys on this matter are Stephanie Liebner, Samuel Jacobson, Sally Tieu, and Michelle White, of the FTC’s Bureau of Consumer Protection.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.
