Attorney General Cuomo Sues Study-at-home Company That Preyed On Unemployed With Promises Of High-paying Government Jobs
POUGHKEEPSIE, N.Y. (December 14, 2009) - Attorney General Andrew M. Cuomo today announced his office has filed a lawsuit against a New Jersey-based company that sold a study-at-home course to unemployed New Yorkers with false promises that the course would lead to civil service jobs.
Cuomo’s lawsuit outlines a pattern of misrepresentations by State National Training Service, Inc. (SNTS) a New Jersey-based company that sells a study-at-home course it claims helps consumers pass civil service exams and gain employment. The company’s misrepresentations led countless unemployed and desperate consumers to enroll with SNTS only to realize afterwards that they had been scammed.
The suit seeks to bar the company from doing business in New York state unless it first files a $300,000 performance bond. It also seeks restitution for those defrauded, plus penalties and costs to the state.
“This company tried to capitalize on the economic crisis with lies, exploiting New York’s job hunters with false promises that did no more than bolster the company’s own bottom line,” said Attorney General Cuomo.
SNTS and its principals, Michael Bell, Jr. and Michael Bell, III, solicited sales of its approximately $1,000 study-at-home courses by advertising sales seminars in specific regions. The company would then conduct seminars for consumers who pay a nominal fee to attend. Individuals who attended were told that if they took the course, they would pass a government civil service exam to get job with an average annual salary of $60,517. They were also told that if they couldn’t afford the program, either the state unemployment office or the Department of Social Services would reimburse them. All of these claims were false.
According to complaints from consumers who attended these sales seminars, SNTS representatives made multiple false and fraudulent claims, including:
- They were government employees, suggesting that the course they are selling is a government-sponsored program.
- The cost of the study-at-home course they were selling would be reimbursed by various government agencies, namely unemployment offices and departments of social services.
- Those attending the seminar and completing their home study course would be able to apply for employment at the U.S. Department of Homeland Security or other law enforcement positions.
- Those who took the home study course would be able to secure civil service employment. In particular, SNTS representatives failed to advise customers that passing a civil service exam does not guarantee a civil service job.
SNTS also employed high-pressure sales tactics to convince customers to purchase the $1,000 courses at the conclusion of the presentation before they had an opportunity to examine whether the program would have value to them, verify the claims that SNTS is a government program, or determine whether SNTS’ claims about reimbursement for the cost of the course were accurate. To further pressure consumers to enroll immediately, SNTS offered everyone attending the seminars instant credit with no credit check and no down payment.
Since SNTS has no office where it conducts business, the company is subject to New York state’s “Door-to-Door Sales Protection Act,” which requires sellers to provide both verbal and written notice to customers of their rights to cancel. SNTS failed to provide such notices.
Finally, the company claimed that anyone could cancel within a matter of days. However, most consumers who signed up on the spot had trouble canceling in a timely manner. When consumers did successfully cancel, it was only after paying a significant cost.
Repeatedly, SNTS had consumers enter into retail installment contracts to pay for the study-at-home courses. SNTS then later assigned these contracts to Conrad Acceptance Corporation (CAC). The suit claims that while CAC did not engage in any of the acts and practices alleged in the lawsuit, it is jointly liable for restitution for those consumers who financed their purchases from SNTS and signed retail installment contracts with CAC.
The Attorney General’s lawsuit seeks to bar SNTS and its principals from selling home study courses in New York state unless they first file a $300,000 performance bond with the state. It also seeks to require SNTS to make restitution to all consumers sold study-at-home courses in New York state between October 13, 2006 and the present, plus significant costs and penalties to the state. The suit also orders the company to cease any collection efforts against customers.
According to court records, SNTS held seminars in the following regions:
- NYC Metro: New York City (3/9/07, 5/5/07) and Staten Island (2/17/07, 6/18/07 and 6/2/08)
- Western NY: Niagara Falls (7/23/07 and 4/15/08) and Olean (3/19/07)
- Rochester/Finger Lakes: Geneva (4/14/07) and Rochester (5/5/07, 7/25/07 and 4/16/08)
- Syracuse (4/27/07, 6/27/07 and 4/17/08)
- Hudson Valley/Catskills: Kingston (1/26/07, 6/20/07), Middletown (3/5/07), Monticello (1/9/07, 4/22/08), Newburgh (2/10/07, 1/22/08, 4/24/08) and Poughkeepsie (1/27/07, 3/31/07, 1/25/08 and 4/25/08)
- Capital Region: Schenectady (6/19/07) and Troy (6/18/07)
- Mohawk Valley: Rome (4/13/07) and Utica (6/26/07)
- North Country: Plattsburgh (4/21/07) and Watertown (6/28/07)
- Southern Tier: Elmira (4/18/08) and Norwich (6/25/07)
Attorney General Cuomo urges anyone who did business with SNTS to contact his Poughkeepsie Regional Office at 845-485-3900 in order to be eligible to participate in the suit.
The case is being handled by Assistant Attorney General G. Nicholas Garin under the supervision of Assistant Attorney General-In-Charge of the Poughkeepsie Regional Office Vincent Bradley, Jr. Investigator Kathleen Coppersmith and Senior Consumer Frauds Representative Mark Hoops assisted in the case.