Online career-training company Career Step, LLC has been mandated to pay $43.5 million in debt cancellation and cash refunds to settle charges by the Federal Trade Commission (FTC). The FTC alleged that Career Step misled consumers, particularly servicemembers and their families, with deceptive advertisements. These ads falsely exaggerated employment outcomes, job placement services, and partnerships with prominent companies, according to the FTC.
Career Step will provide $27.8 million in debt cancellation and $15.7 million in cash, which will be used to compensate consumers affected by their misleading advertising practices.
“Servicemembers and their families dedicate themselves to protecting our freedoms,” stated Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are committed to ensuring they receive truthful information, not misleading promises, when they seek to use their hard-earned benefits for further education.”
According to the FTC’s complaint, Career Step, operating also as CareerStep, CareerCert, and Carrus and based in Georgia, promotes career training and certification programs in the healthcare sector, specifically targeting military personnel and their spouses. Since at least 2019, the complaint details, Career Step has used deceptive advertising on social media and its website to attract servicemembers. They utilized sales representatives and AI technology to persuade individuals to enroll in their programs. The company also marketed its services through military-focused publications, such as Military.com, and at military-sponsored events, including job fairs. Career Step allegedly made false claims regarding job placement rates, employment outcomes, externship opportunities, hiring partnerships, and the duration of its programs, often bolstered by deceptive incentivized reviews to promote their offerings.
The FTC’s complaint highlights that Career Step representatives falsely guaranteed job placement for consumers. For instance, representatives reportedly claimed that a “career placement team” would find consumers their “perfect job.” In reality, Career Step does not offer job placement services. Their job search assistance is limited to basic resume drafting help or sending links to publicly available job postings online.
Furthermore, the complaint states that the company misrepresented that “most learners” and “over 80% of its graduates,” or program completers, secure employment in their field of study. Career Step’s claims about employment outcomes were based solely on optional surveys sent only to those who completed their programs. A significant portion of participants do not finish the program and thus never receive a survey. Among those who do receive a survey, the majority do not respond. For example, a 2020 survey involving 9,330 enrollees and 2,126 program completers saw a response rate of only 5% of enrollees or 24% of program completers, representing a very small and potentially skewed sample.
Career Step’s website also falsely claimed partnerships with leading healthcare businesses to provide employment for its graduates, according to the FTC. The company prominently displayed logos of well-known “Hiring Partners” such as CVS and Walgreens on its homepage. Sales representatives also told consumers, “We have over 50,000 partnerships so we’ll help you find some place to work.” In reality, Career Step’s agreements with companies like CVS and Walgreens did not include job placement guarantees after graduation.
The FTC also accused Career Step of falsely promising students externship placements as part of their programs. However, the complaint revealed that less than 10 percent of students in programs requiring externships were ever placed in one. The lack of externships prevented these consumers from completing their programs, wasting their invested time and money with Career Step.
The company also falsely advertised program completion times of four months or less, even though most Career Step students never finish their programs. Even among those who do complete them, most take considerably longer than four months due to obstacles created by the company. Consumers reported frequent website issues and difficulties in getting responses from Career Step representatives. Additionally, due to the company’s failure to secure externships for students, many programs expired before completion, or students were forced to pay for program extensions, which could cost up to $999.
Finally, Career Step operated a deceptive incentivized review program to encourage students to post reviews on platforms like BBB, Google, and Trustpilot, according to the complaint. The company offered students a free extension—up to three months of “complimentary” extra program time—for leaving a review on each of these sites. Students were required to screenshot or copy the link to their review and send it to Career Step as proof. Many of these reviews deceptively appeared to be genuine opinions and experiences of ordinary, uncompensated Career Step students, potentially misleading prospective students relying on online reviews to make informed decisions about their career training. This practice is particularly concerning in the context of “Career Step Coding Reviews” or reviews for any online career training, where authenticity and unbiased feedback are crucial for potential students.
The proposed settlement, pending approval from a federal judge, requires Career Step to pay $15.7 million, which the FTC will use for consumer refunds. The company must also cancel approximately $27.8 million in debts owed by current and former students who enrolled between February 2020 and February 2023. The stipulated order further prohibits Career Step from deceptively advertising any educational product or service.
Specifically, Career Step is barred from misrepresenting:
- Employment, hiring, or career prospects
- The number or percentage of consumers who find employment
- Whether any individual was employed, hired, or obtained a job as a result of Career Step’s programs
- Partnerships with any companies or employers
- Career services
- Its externship program
- The typical or expected program duration
- The total costs or terms of the educational program or service
- The objectivity or impartiality of any content
- Any fact material to consumers concerning any good or service.
Moreover, Career Step must notify each third-party platform or website hosting reviews from consumers who received free services in exchange for reviews about the FTC’s action. This notice must include a list of all such reviews with sufficient detail for the platform to identify them easily. Career Step is obligated to inform these platforms about the FTC order and request the removal of these incentivized reviews as soon as possible, ensuring greater transparency in online reviews for prospective students researching career training options.
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 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 Commission initiates a complaint when it has “reason to believe” that defendants are violating or about to violate the law and deems the proceeding to be in the public interest. Stipulated final orders are legally binding once approved and signed by a District Court judge.
