The online career-training company, Career Step, LLC, has been mandated to pay a significant $43.5 million in debt cancellation and cash refunds. This action comes as a resolution to charges by the Federal Trade Commission (FTC), which highlighted the company’s deceptive advertising tactics. These tactics are alleged to have misled consumers, particularly servicemembers and their families, with false promises regarding job placement rates, career outcomes, and partnerships with well-known companies. These practices, ongoing since at least 2019, have impacted various career paths, including medical coding, and issues surrounding program extensions.
Career Step will be required to cancel $27.8 million in student debt and provide $15.7 million in cash as redress to those affected by their misleading advertisements. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasized the importance of protecting servicemembers and their families from deceptive educational opportunities, ensuring they receive factual information rather than false promises when utilizing their educational benefits.
According to the FTC complaint, Career Step, operating also as CareerStep, CareerCert, and Carrus, has been actively promoting career training and certification programs within the healthcare sector, specifically targeting military personnel and their spouses. Since at least 2019, Career Step has reportedly employed deceptive advertising across social media and their website. They utilized sales representatives and AI technology to aggressively persuade individuals to enroll in their programs. Their marketing efforts extended to military-focused publications like Military.com and military-sponsored events, including job fairs. The core of the FTC’s complaint centers on Career Step’s false claims concerning job placement, career outcomes, externship opportunities, partnerships with hiring companies, and the actual duration of their programs. These misleading claims were often amplified through deceptive incentivized reviews used to promote their services.
One of the key deceptive practices highlighted in the FTC complaint is Career Step’s false promises of job placement assistance. Career Step representatives allegedly claimed that a dedicated “career placement team” would find consumers their “perfect job.” However, in reality, Career Step does not provide job placement services. Their assistance is limited to basic resume advice and links to publicly available job postings online.
Furthermore, Career Step has been accused of misrepresenting employment outcomes, claiming that “most learners” and “over 80% of its graduates” secure employment in their field of study. These claims were based on optional surveys sent only to program completers. A significant issue is that the majority of enrollees do not complete their programs and, therefore, never receive these surveys. Even among those who do receive the survey, response rates are low. For instance, a 2020 survey revealed that out of 9,330 enrollees and 2,126 program completers, only 5% of enrollees or 24% of program completers completed the survey, representing a very small and potentially biased sample.
Career Step’s website also falsely claimed partnerships with leading healthcare businesses to provide job opportunities for graduates. Logos of well-known companies like CVS and Walgreens were prominently displayed as “Hiring Partners” on their homepage. Sales representatives allegedly told consumers about “over 50,000 partnerships” to aid in job searching. In truth, agreements with companies like CVS and Walgreens were not related to post-graduation job placement assistance.
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Alt: Career Step homepage example showcasing “Our Trusted Employer Network” with partner logos, implying job placement opportunities.
The FTC also challenged Career Step’s claims regarding externships. Despite promising externship placements as part of their programs, the complaint states that less than 10% of students in programs requiring externships were actually placed. The lack of externship opportunities prevented students from completing their programs, resulting in wasted time and financial investment in Career Step. This issue is particularly relevant for programs like medical coding, where practical experience is often crucial for career entry.
Adding to the deceptive practices, Career Step allegedly misrepresented the time required to complete their programs. They promised program completion within four months or less. However, the vast majority of Career Step students did not complete their programs, and even those who did typically took significantly longer than four months. Students reported website issues and lack of responsiveness from Career Step representatives as obstacles. Moreover, the failure to secure promised externships led to program expirations before completion or forced students to pay for program extensions, sometimes costing as much as $999. This issue of program extensions, particularly in programs like medical coding, became a significant financial burden for many students who were already facing misleading promises. The pressure to purchase extensions, especially for programs advertised with short completion times, is a critical point of concern for students who enrolled in Career Step medical coding programs around 2019 and later, as the deceptive practices were ongoing since then.
Career Step also implemented a deceptive incentivized review program. They offered students free program extensions—up to three months of extra time—in exchange for posting positive reviews on the BBB website, Google, and Trustpilot. Students were required to provide proof of their reviews to Career Step. These incentivized reviews falsely portrayed the experiences of compensated students as genuine, unbiased opinions.
The settlement, awaiting federal judge approval, mandates Career Step to pay $15.7 million for consumer redress and cancel approximately $27.8 million in debts for students who enrolled between February 2020 and February 2023. Furthermore, Career Step is legally prohibited from deceptive advertising of any educational product or service in the future.
Specifically, the stipulated order forbids Career Step from misrepresenting: employment prospects, the number or percentage of employed graduates, job attainment as a result of Career Step programs, partnerships with employers, career services, externship programs, program duration, program costs, content objectivity, or any material fact concerning their services.
Finally, Career Step is obligated to notify third-party platforms hosting incentivized reviews about the FTC action and request the removal of these reviews.
The FTC’s vote to file the complaint and stipulated final order was unanimous (5-0). The case 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 FTC staff attorneys involved in this case are Stephanie Liebner, Samuel Jacobson, Sally Tieu, and Michelle White, from the Bureau of Consumer Protection.
NOTE: The FTC initiates a complaint when it has reason to believe that defendants are violating the law and that action is in the public interest. Stipulated final orders become legally binding upon approval and signature by a District Court judge.
