The online career-training company, Career Step, LLC, has been mandated to pay a hefty sum of $43.5 million in debt cancellation and cash refunds. This action comes as a resolution to charges filed by the Federal Trade Commission (FTC), which accused the company of misleading advertising practices. Specifically, Career Step allegedly targeted consumers, particularly servicemembers and their families, with deceptive ads that falsely promoted exaggerated employment rates, job placement services, and partnerships with well-known companies.
Under the FTC order, Career Step is set to provide $27.8 million in debt relief and $15.7 million in cash. This cash will be allocated to compensate consumers who were negatively impacted by the company’s deceptive advertising tactics.
Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasized the gravity of the situation, stating, “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.”
According to the FTC’s complaint, Career Step, operating also as CareerStep, CareerCert, and Carrus and based in Georgia, is accused of employing deceptive advertising since at least 2019. The company promotes career training and certification programs in the healthcare sector, with a specific focus on attracting servicemembers and their spouses. The FTC alleges that Career Step utilized misleading advertisements on social media and its website. Furthermore, the company employed sales representatives and AI technology to aggressively persuade consumers to enroll in their programs. Career Step also extended its marketing reach through military-centric publications like Military.com and participation in military-sponsored events, including job fairs. The core of the FTC’s accusation lies in Career Step’s false claims concerning job placement rates, employment outcomes, externship opportunities, partnerships for hiring, and the actual duration of their programs. To further bolster their deceptive marketing, Career Step allegedly used incentivized reviews to promote their services.
The FTC complaint highlights instances where Career Step representatives falsely guaranteed job placements for consumers. These representatives purportedly claimed that a dedicated “career placement team” would ensure finding consumers their “perfect job.” Contrary to these assurances, Career Step does not offer any form of job placement services. The extent of their job search assistance is limited to basic resume drafting support or sending out generic job posting links readily available online.
Moreover, Career Step is accused of misrepresenting employment statistics, claiming that “most learners” and “more than 80% of its graduates” secure employment in their field of study. These inflated claims were based on data from an optional survey distributed only to program completers. A significant majority of enrollees do not complete the programs and, therefore, never receive these surveys. Among those who do receive the survey, most do not respond. As an example, a 2020 survey showed that out of 9,330 enrollees and 2,126 program completers, only 5% of enrollees or 24% of program completers actually completed the survey, representing a very limited and potentially skewed dataset.
Career Step’s website also allegedly featured false claims of partnerships with leading healthcare businesses to provide employment opportunities for their graduates. The company prominently displayed logos of well-known entities like CVS and Walgreens under the heading “Hiring Partners” on their homepage. Sales representatives reportedly reinforced this deception by stating, “We have over 50,000 partnerships so we’ll help you find some place to work.” In reality, Career Step’s agreements with companies, including CVS and Walgreens, did not include any provisions for job placement post-graduation.
Career Step homepage example highlighting “Our Trusted Employer Network” which FTC alleges was misleading advertising regarding job partnerships for healthcare career training programs.
The FTC further charged Career Step with falsely advertising externship placements as part of their program offerings. The complaint revealed that less than 10 percent of students in programs requiring externships were ever placed in such positions. The lack of externship placement prevented these students from completing their programs, resulting in a complete loss of their invested time and money.
Career Step also allegedly deceived students about the program duration, promising completion within four months or less. In reality, the vast majority of Career Step students do not complete their programs. Even among those who do, most take considerably longer than four months due to obstacles created by the company. Students reported frequent website issues and significant delays in receiving responses from Career Step representatives. The company’s failure to secure externship placements, a program requirement, led to many students’ programs expiring before completion. Consequently, some students were forced to pay extension fees, which could reach up to $999, to continue their programs.
Adding to the list of deceptive practices, Career Step implemented an incentivized review program to generate positive reviews on platforms like BBB, Google, and Trustpilot. Students were offered a free program extension of up to three months in exchange for posting reviews on each of these three platforms. They were instructed to provide proof of their reviews by sending screenshots or links back to Career Step. These incentivized reviews often misleadingly appeared as genuine, unbiased opinions from ordinary Career Step students.
The proposed settlement, awaiting approval from a federal judge, mandates Career Step to pay $15.7 million for consumer redress. Furthermore, the company is required to cancel approximately $27.8 million in debts owed by current and former students who enrolled between February 2020 and February 2023. The stipulated order also prohibits Career Step from engaging in deceptive advertising for any educational product or service in the future.
Specifically, Career Step is now legally restricted from misrepresenting the following:
- Employment, hiring, or career prospects
- The number or percentage of consumers who find employment
- Whether any individual obtained employment or a job as a result of Career Step’s programs
- Partnerships with any companies or employers
- Career services offered
- The externship program
- The typical or expected program duration
- The total costs and terms of their educational programs
- The objectivity or impartiality of any content
- Any fact material to consumers regarding their services
Finally, Career Step is obligated to inform every third-party platform or website hosting reviews written by consumers who received free services in exchange for those reviews about the FTC’s action. This notification must include a comprehensive list of all such reviews, enabling the platforms to easily identify and remove them. Career Step is required to inform these platforms about the FTC order and request the swift removal of the deceptive reviews.
The Commission’s vote to authorize the staff to file the complaint and the stipulated final order was unanimous (5-0). The complaint and stipulated final order are to be filed in the U.S. District Court for the Northern District of Georgia. Commissioners Melissa Holyoak and Andrew N. Ferguson issued concurring statements on this matter.
The FTC staff attorneys involved in this case are Stephanie Liebner, Samuel Jacobson, Sally Tieu, and Michelle White, all from the Bureau of Consumer Protection.
NOTE: The FTC 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 become legally binding upon approval and signature by a District Court judge.
