Senators Call For Regulations Against Fraudulent Schools Like Trump University

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Sens. Bernie Sanders, Elizabeth Warren, and several other Democratic Senators sent a letter this week urging the heads of the Federal Trade Commission (FTC), Department of Veterans Affairs (VA), Consumer Financial Protection Bureau (CFPB), and Education Department (ED) to take immediate steps to protect students and veterans from “potentially fraudulent institutions like Trump University.” Besides calling for federal agencies to design a consumer warning system, the senators also asked the agencies to enhance and prioritize enforcement of federal consumer protection laws.

“We write today in light of mounting evidence that Trump University, a for-profit real estate training company, and its 93 percent owner and chairman, Donald J. Trump, engaged in unfair and deceptive marketing and potentially fraudulent activity that deceived consumers regarding the company’s status as a university,” the letter opened. “We find these actions to be unacceptable and ask that you take proper and necessary steps to prevent the creation of additional Trump University-like entities that prey on the hopes, dreams, and aspirations of students and their families.”

Not chartered as a university nor licensed to offer instruction or training, Trump University had been notified in 2005 that it was operating in violation of New York State law by continuing to refer to itself as a “university.” Despite the fact that Trump University officials agreed to move the operation out of the state, the owners and executives continued to market the business as a university for another five years in New York before changing the name to the Trump Entrepreneur Initiative in 2010.

“During this period, Trump University employees used terms that implied it was a university including ‘faculty,’ ‘tuition,’ ‘curriculum,’ and ‘graduates,’ and some instructors even discussed ‘graduate programs, post-graduate programs, and doctorate programs’ even though the only substantive difference between the courses appears to have been how much money they cost students,” the senators wrote. “As many as 10,000 consumers paid between $1,500 and $35,000 to attend real estate seminars that left them little more than a worthless certificate and a pile of debt.”

On August 25, 2013, New York Attorney General Eric Schneiderman sued Donald Trump, the Trump Entrepreneur Initiative (formerly Trump University), and Trump University’s former president “for engaging in persistent fraudulent, illegal and deceptive conduct in connection with” the university’s operation. A few weeks later, the Orlando Sentinel reported that Florida Attorney General Pam Bondi was considering whether to prosecute Trump and his university for pulling a scam and ripping off students across several states.

Three days later, the Trump Foundation illegally donated $25,000 to And Justice for All, a pro-Bondi group supporting her 2014 reelection. Not only did Bondi decide not to investigate Trump, she also endorsed him for president a few months ago.

“In order to ensure the integrity of our higher education and workforce training programs, we request that you take immediate steps to warn consumers regarding unlicensed and potentially fraudulent universities,” the letter continued. “Specifically, we ask that your agencies work together to create a consumer warning tool, such as an online database or other consumer information tool, that alerts and warns potential students and veterans when a business deceptively markets itself as “university” in the absence of a state license or charter, or in the absence of accreditation.”

Addressed to ED Secretary John King, FTC Chairman Edith Ramirez, CFPB Director Richard Cordray, and VA Secretary Robert McDonald, the letter also asked the agencies to enhance and prioritize enforcement of federal consumer protection laws meant to safeguard consumers against deceptive institutions like Trump University. Sent on Thursday, the letter was signed by a dozen Democratic Senators, including Sens. Bernie Sanders, Elizabeth Warren, Dianne Feinstein, Ron Wyden, and Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Patty Murray.

“Please respond no later than August 31, 2016, regarding the actions that your agencies will take to establish such a system and to enhance enforcement against such entities,” the letter concluded. “We look forward to learning the steps you will take to ensure that consumers receive appropriate warning before spending hard earned dollars on programs like those offered by Trump ‘University.’”

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