NYC DCA Charges For-Profit College With Deceptive And Predatory Practices

The New York City Department of Consumer Affairs has announced a lawsuit against Berkeley College – a for-profit colleges in New York State – for allegedly violating NYC consumer protection laws and debt collection rules. The lawsuit alleges numerous violations and wide-ranging consumer harm, and seeks to end Berkeley’s alleged unlawful practices and restore any illegal profits back to consumers.

“For-profit colleges are businesses, and like most businesses, their top priority is generating profits,” said DCA Commissioner Lorelei Salas. “Our investigation into Berkeley College reveals that their recruiters appear to say whatever they think a prospective student wants to hear, especially when it comes to academic programs, employment, transfer credits, and federal student loans – regardless of the truth – to convince them to enroll. These aggressive recruiting tactics are designed to prey on the hopes and dreams of consumers seeking improved career prospects and greater financial security to better care for themselves and their families.”

The lawsuit follows a nearly two-year investigation allegedly revealing that Berkeley engages in aggressive recruiting and debt collection tactics by luring consumers with misleading sales pitches. Specifically, the lawsuit alleges, among other things, that Berkeley: (i) misled students about financial aid, including federal financial aid; (ii) tricked students into taking out loans directly from Berkeley; (iii) deceiving students about institutional grants; and (iv) deceived students about transfer credits, majors, and careers; (v) violated local debt collection laws by concealing its identity from former students when collecting debt, including debt that is not owed.

“For-profit colleges are primarily concerned with their bottom line, not the welfare of their students,” said Council Member Rafael Espinal. “At a time when student debt is soaring, it is unacceptable that schools like Berkeley are preying on people – many of them from low-income backgrounds – seeking to better their lives. Meanwhile, U.S. Education Secretary Betsy DeVos and the Trump administration are working overtime to roll back regulations on for-profit colleges. That’s why vigorous enforcement at the local level against bad actors has never been more important. I applaud DCA’s actions, and look forward to deepening our efforts to hold for-profit colleges accountable.”

“The charges against Berkeley College mirror the issues we hear about from attendees of for-profit schools,” said Senior Staff Attorney Evan Denerstein of Mobilization for Justice. “Misrepresentations by for-profit schools about grants and scholarships, graduation and employment rates, and quality of education, all induce students into accumulating crippling amounts of debt for little or nothing in return.”

Richard Newman is an New York City (NYC) Department of Consumer Affairs (DCA) defense lawyer at Hinch Newman LLP.  

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