On December 8, 2010, The Texas Tribune featured, “Private, for-profit colleges under the microscope.” The article discusses the ongoing federal hearings to rein in these institutions. The students attending these career colleges are nearly two-thirds minorities and often first-generation college-goers. They are paying significant tuition rates and taking out huge loans to attend. Student often has a hard time transferring their credits or even finding a job after graduation.
How does our State regulate this industry? The Texas Workforce Commission and the Texas Higher Education Commission assist, but there is no state regulation to prevent predatory recruitment.
Julie Johnson, a school fraud attorney, is featured in the article as an advocate for the students. Ms. Johnson currently represents victims of these institutions.
For more information about school fraud, please visit www.juliejohnsonlaw.com.
Over the past several years, enrollment in for-profit colleges has grown from 365,000 to 1.8 million students. These students received $4 billion in Pell Grants and $20 billion in federal loans in 2009 alone. That’s a lot of federal money being given away to help students achieve their long-term career goals. But, is the money being spent properly? Are these schools becoming the next money-hungry business in America?
The United States Government Accountability Office conducted an undercover investigation into fifteen for-profit colleges to find out just that. Are these schools operating to help the students or merely take their money? The purpose of the investigation was two-fold: (1) to determine whether the colleges were engaging in fraudulent, deceptive, or other questionable marketing practices and (2) to compare the tuition rates with other colleges in the region. They sent undercover applicants to schools in Arizona, California, Florida, Illinois, Pennsylvania, Texas, and Washington, D.C.
The results are startling! All fifteen schools engaged in deceptive or otherwise questionable statements to applicants. That means that when these students went to enroll, they were told false or misleading information about the value of education and their future success in their careers. Four colleges encouraged applicants to submit false information on financial forms. This would mean the school would make a lot more money from our federal government. The study also found the schools cost more than associate’s degrees and certificates at comparable institutions in the geographic region.
In today’s economic climate, individuals who are out of work and cannot find a job are turning to get a degree and furthering their education. The degree could be in anything from massage therapy to management. People are lured by the promise of a high-paying career, an education in a short period of time, and a way out of their current dire situation. These schools are preying on these people by lying to them and giving them a worthless degree.
Is your school engaging in fraudulent practices? Are you a victim of these colleges? Go to www.juliejohnsonlaw.com to find out.
For the full report provided in Testimony Before the Committee on Health, Education, Labor, and Pensions before the U.S. Senate, August 4, 2010.
A disturbing trend has surfaced in the for-profit education industry. Stories of students being misled about program certification, transferability of credits, and enormous loan burdens seem to be in the news every month. Students that don’t get the education they bargained for are left with a mountain of debt and are still unqualified for the jobs they sought. As a result, these students often are unable to pay back the money they borrowed. When students do not make payments on their federal loans and the loans are in default, the federal government and taxpayers assume nearly all the risk and are left with the costs. The only winners are the for-profits that reap millions in profit from the taxpayers they exploit.
Not all for-profits are bad actors, some are forthright about their programs and the costs associated with them. If you have questions on whether or not your school has committed education fraud to consider the following:
The U.S. insurance industry takes in over $1 trillion in premiums annually. It has over $3.8 trillion in assets, more than the GDPs of all but two countries in the world, the U.S. and Japan. Its CEOs are among the highest-paid, with an average annual income of $1.6 million per year. How do the insurance companies amass this wealth? At your expense. “Deny, Delay, Defend.” The three Ds, as they are called, has become shorthand for the way insurance companies put profits over policyholders. This blog will focus on the first, “deny.”
You are driving to work one morning, stuck in traffic. All of a sudden a huge truck runs a red light and plows into the side of your car. Worst case scenario. You’re admitted to the hospital where you lay in a coma for two weeks, with multiple broken bones and massive internal injuries. Months of recuperative therapy are ahead for you. The driver of the truck doesn’t have nearly enough insurance to pay for the health care you need but luckily you purchased an underinsured motorist policy of your own, right? Wrong. You make a claim on the policy only to get a response from your insurance company telling you that its investigation revealed that the driver of the truck barreled into your car in a deliberate act of road rage, so the accident wasn’t really an “accident” after all! This was the experience of Ethel Adams of Seattle, Washington, who had a $2 million UIM policy with insurance giant Farmers. She was left with tens of thousands of medical bills she could not pay because she was too injured to return to work.
Was Adams’ experience unusual? Not so much. Denying claims is one-way insurance companies make money. Sometimes they do this by incentivizing claim denials, sometimes they do it by tricky policy language, and sometimes they do it by outright fraud. Farmers once ran a program called “Quest for Gold,” which included pizza parties and gift certificates to claims adjusters who met low payment goals. Allstate rewarded the adjusters who met such goals with portable refrigerators. Many insurance companies pay outright money bonuses to adjusters who deny claims. With these kinds of schemes, how likely do you think it is that the adjuster will honor your claim?
After Hurricane Katrina, thousands of homeowner claims were denied by Allstate, who had inserted ambiguous “anti-concurrent-causation” clauses into their policies that deceived policyholders into thinking they had coverage for wind damage when actually they did not. These clauses state that wind and rain damage – damage that was covered under the policy – was excluded if significant flood damage occurs as well. Therefore, people who had purchased policies that covered wind and rain damage still had their claims denied simply because the storm caused flooding as well. These obscure policy “loopholes” are perhaps the most insidious way insurance companies make money, because you pay for, and think you have, the coverage that you actually never had.
After the 1994 Northridge earthquake, State Farm, like any “good neighbor,” forged signatures on waivers of earthquake coverage to avoid paying quake-related claims. In California, disability insurance carrier Unum was denying one in every four claims for long-term care insurance. The California Department of Insurance investigated and found widespread fraud by the company in 2005. Unum had systematically violated state insurance regulations, fraudulently denied or low-balled claims using phony medical reports, policy misrepresentations, and biased investigations.
The insurance industry is replete with these kinds of practices. Luckily legislators have stepped in to address many of these abuses but as long as insurance remains a for-profit enterprise, there will always be tension between policyholders and profits. You need an advocate. If your insurance company has engaged in any of these practices with you, contact an attorney well-versed in consumer and bad faith insurance law. Julie Johnson has devoted her career to fighting these kinds of practices, and she will put her expertise to use for you.
You just left the dealership. Your favorite compact disc is playing, the top is down and you’re feeling great in your new shiny red ragtop. You secretly congratulate yourself on the sweet deal you struck with the dealer. You are looking forward to looking at the documents once they are delivered to you as promised.
A week later the mail comes and in it is a package of documents from the dealer. You open the letter and start to review the documents. “I didn’t agree with that. The amount I borrowed is not right, I didn’t agree to that interest rate, I didn’t agree to that long of a loan.”
Under Texas law when there is an installment loan agreement for a car the dealership must dealership disclose the terms of the final deal in writing before the deal is finalized. The terms that must be disclosed include the amount financed, the interest rate, the length of the loan, and several other items such as the lender. Depending on the circumstances you may have a right to remedies under the law.
As always, the best advice is to obtain a copy of the documents before you agree to anything. Review the documents; ask questions if you are unsure about anything.
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us form.
Often when buyers have made the decision to buy a new car they begin to think with their emotions and become easy prey for unscrupulous car dealers. A consumer in this position may fall victim to a practice known as “padding” or “packing.” A dealer may quote an unnecessarily high monthly payment. If the buyer agrees with it, the shady dealer will go back and add extras like fabric protection, alarm systems, diamond ultra coat paint armor, unwanted GAP insurance, or whatever he can come up with. After the price of these often overpriced, high-profit items are added into the amount financed for the car itself the monthly payment conveniently adds up to the previously quoted amount. Car dealers who engage in these practices without full disclosure to the customer engage in fraud.
The buyer may never be told these optional items were added or may be told they are “free” with the purchase. The bottom line is that these items are often added to increase the profit margin for the dealer and not to benefit the buyer. The buyer may actually want some of the items, but should always have the option of deciding for himself and should not be deceived about the price of the extras. If you notice extra items that you don’t want to ask questions, or just refuse to buy the vehicle with them. If the dealer will not accommodate you take your business elsewhere.
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us form.
Was I overcharged for my car? Cars and trucks are expensive. Second, only to a home, a vehicle is the most expensive purchase a typical consumer will ever make. Unfortunately, it is sometimes difficult to determine exactly what was paid for a car if an unscrupulous dealer muddies the water with a deceptive trade-in valuation. Let’s assume that you have your heart set on a new Acme 3000 roadster, but you still owe $7,000.00 on the car you are presently driving. The dealer might lead you to believe that they will give you $7,000.00 in trade-in credit for the old car and that the loan will be paid off. All you have to think about is the price of the new roadster. But if the actual value of the trade-in is less than what is owed (you are upside-down on the loan) a less than honest dealer might increase the price of the new car to make up the difference. The buyer has a new car but also has a higher price, higher payments, and higher tax and registration fees than they should have. In Texas, if a car dealer is found to have acted deceptively in the pricing of a new car and the valuation of a trade-in it may be liable under the Texas Deceptive Trade Practices Act and may be financially liable to the consumer who was cheated. There are also Texas laws administered by the Texas Department of Motor Vehicles that make it improper for a dealer to advertise a vehicle at a price that it will not sell it for. In such a case, the Department of Motor Vehicles can take action against the dealers, which may end in civil penalties.
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us at www.juliejohnsonlaw.com/contact-us/.
What Is a Bad Faith Claim?
When an insurance company fails to uphold the duties it owes to its policyholders, the insurance company has committed a bad faith act.
Insurance companies owe their policyholders (or “insureds”) important duties by virtue of the insurance contract, including the duty of good faith and fair dealing. For example, when a policyholder files a claim with his or her insurance company, the insurer is required to conduct a reasonable and full investigation into the claim. The insurance company cannot arbitrarily deny the claim, delay payment, or decide to pay less than the full value of benefits owed under the insurance policy.
Unfortunately, these and other bad faith practices have become far too common in the insurance industry. While many insurers are more than happy to accept a policyholder’s premiums, they have been less than willing to pay out the same policyholder’s legitimate claims — even when those claims clearly are covered by the policies they issued.
A common type of scheme in the car sales industry is odometer tampering. Odometer tampering involves rolling the mileage on a car back. A car with fewer miles on it is worth more than one with high mileage and can be sold to a buyer for more money. If a buyer is assured that the bright red roadster has only 15,0000 miles on it she might be willing to pay more for it than if it had 115,000 miles on it. The consumer would not have paid as much for the car or may not have bought the car at all if she had known the true facts. The car buyer has been deceived, she acted on the fraudulent information and she has been damaged by overpaying for the vehicle. She has been defrauded.
The problem of odometer tampering is so significant that the Federal government undertook a study of the issue a few years ago. The study was performed by the NHTSA, which concluded that there are around 240,000 cases of tampering a year in the United States. There are laws at the federal and state level that prohibit odometer tampering.
Often the vehicles that are tampered with are late model cars that have amassed a lot of miles in a short period of time. A three-year-old vehicle with 80,000 might have its mileage rolled back to 30,000 miles and be sold as a low mileage car. The consumer thinks they have found a vehicle that has very little wear and tear on it that will be reliable well into the future. The reality is that the vehicle may be more prone to breakdowns, will need repairs and maintenance soon, and has a lower value than the buyer thought.
A consumer who has been defrauded through odometer tampering can sue the dealership and if the case is proven can collect damages from the wrongdoer.
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us.