The Federal Trade Commission (FTC) recently announced that Career Education Corporation (CEC) and its subsidiaries, American InterContinental University, Inc., AIU Online, LLC, Marlin Acquisition Corporation, Colorado Technical University, Inc., and Colorado Tech., Inc. (collectively, CEC), have been ordered to pay $30 million to the FTC to settle Federal Trade Commission charges that the operator used sales leads from lead generators that falsely told consumers they were affiliated with the U.S. military, and they used other unlawful tactics to generate leads. CEC’s lead generators also induced consumers to submit their information under the guise of providing job or benefits assistance. The FTC also charged that CEC’s lead generators falsely told consumers that their information would not be shared, and that both CEC and its lead generators illegally called consumers registered on the National Do Not Call (DNC) Registry.
This recent FTC enforcement action highlights the regulatory risk associated with lead generation and telemarketing activities. Given the significant regulatory risks, as well as the increasing risk of class action litigation brought under the Telephone Consumer Protection Act (TCPA), businesses should carefully evaluate their telemarketing practices to ensure compliance with the complex regulatory framework surrounding telemarketing activities.
The full text of the Proposed Stipulated Order for Permanent Injunction and Monetary Judgment is set forth below.