FTC Begins Sending Refunds to Consumers in Career Step Settlement

The Federal Trade Commission (FTC) said Wednesday (March 12) that it is sending more than $15.5 million in refunds to consumers after reaching a settlement with online career-training company Career Step in July.

In its complaint, the FTC alleged that Career Step targeted servicemembers and their spouses with deceptive ads and false claims about job placement and career outcomes, externships and hiring partnerships, according to a Wednesday press release.

The agency also alleged that the company promoted its services with deceptive incentivized reviews, per the release. Career Step offered “free” program extensions to students in exchange for posting reviews online, according to the FTC’s refund program page.

Reached by PYMNTS, Career Step said in an emailed statement that it has enhanced its policies and procedures.

“For 32 years, CareerStep has provided practical, affordable career training services to more than 170,000 learners who have enrolled with us (based on data from 2015-2024) across all 50 states looking to better their lives, and our programs fill critical gaps in the healthcare workforce,” the statement said.

“In recent years, we have put in place a new, experienced leadership team and enhanced our policies and procedures to ensure our people and business practices are responsible and compliant,” Career Step’s statement added. “We are committed to operating with the utmost integrity while delivering accessible, effective training that our learners, partners and the healthcare industry need and value.”

The settlement reached in July required Career Step to pay more than $15.5 million that the FTC is using to compensate students harmed by the deceptive advertising; cancel nearly $28 million in unpaid balances owed by students who enrolled between February 2020 and February 2023; and stop the alleged deceptive advertising of educational products or services, according to the FTC press release.

When the FTC announced the settlement in July, Samuel Levine, who was director of the FTC’s Bureau of Consumer Protection at the time, said in a press release: “Servicemembers and their families make sacrifices every day to protect our freedoms. 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.”

The FTC reported Monday (March 10) that consumers reported more than $12.5 billion in fraud losses last year, a number that was 25% higher than the one reported in 2023.