Career Step, an online career training company, has been mandated to pay $43.5 million in debt cancellation and cash refunds to settle charges by the Federal Trade Commission (FTC). The FTC alleged that Career Step engaged in deceptive advertising, specifically targeting servicemembers and their families, by promoting inflated employment outcomes, job placement services, and partnerships with well-known companies that were untrue.
As a result of the settlement, Career Step will provide $27.8 million in debt cancellation and $15.7 million in cash, which will be distributed as redress to consumers who were misled by their advertising practices.
“Servicemembers and their families dedicate themselves to safeguarding our freedoms,” stated Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are committed to ensuring they receive truthful information, not misleading fantasies, when they seek to utilize their educational benefits to further their careers.”
According to the FTC complaint, Career Step, operating also under the names CareerStep, CareerCert, and Carrus, is a Georgia-based company that markets career training and certification programs primarily in the healthcare sector. They specifically targeted servicemembers and their spouses. The FTC detailed that since at least 2019, Career Step has used deceptive advertising across social media and its website. They utilized sales representatives and AI technology to aggressively persuade consumers to enroll in their programs. Furthermore, Career Step marketed their services in military-focused publications like Military.com and at military-sponsored events, including job fairs. The core of the FTC’s accusation is that Career Step made false claims regarding job placement rates, employment outcomes, externship opportunities, partnerships with hiring companies, and the actual duration of their programs. They also allegedly used deceptive incentivized reviews to bolster their marketing efforts.
The FTC complaint highlighted that Career Step representatives made explicit false promises to consumers that the company would secure jobs for them. For instance, sales representatives allegedly claimed a dedicated “career placement team” would find consumers their “perfect job.” Contrary to these assurances, Career Step does not provide job placement services. Their job search assistance was limited to basic resume advice and sending generic job posting links readily available online.
Furthermore, Career Step falsely represented that “most learners” and “more than 80% of its graduates” were successfully employed in their field of study after completing their programs. These employment outcome claims were based on an optional survey sent only to program completers. Critically, the vast majority of enrollees did not complete their programs and therefore never received this survey. Of those who did receive the survey, most did not respond. To illustrate, a 2020 survey revealed that out of 9,330 enrollees and 2,126 program completers, only 5% of enrollees and 24% of program completers completed the survey, representing a very small and potentially unrepresentative sample.
Career Step’s website also falsely asserted partnerships with leading healthcare businesses to provide job opportunities for their graduates. The company prominently displayed logos of well-known companies like CVS and Walgreens as “Hiring Partners” on their homepage. Sales representatives reportedly told consumers, “We have over 50,000 partnerships so we’ll help you find some place to work.” In reality, Career Step’s agreements with these companies, including CVS and Walgreens, had no connection to post-graduation job placement.
Career Step’s Homepage Example of Misleading “Trusted Employer Network” Claims
Adding to the list of deceptive practices, the FTC found that Career Step falsely advertised guaranteed externship placements as part of their programs. The complaint revealed that less than 10 percent of students in programs that required externships were ever actually placed in one. The lack of externship placement prevented many consumers from completing their programs, resulting in wasted time and money invested in Career Step.
Career Step also misled students about the time required to complete their programs, promising completion within four months or less. However, the vast majority of Career Step students never finished their programs. Even among those who did graduate, most took significantly longer than four months, often due to obstacles created by the company itself. Students reported frequent website issues and unresponsive customer service. The failure to secure promised externships also led to program expirations before completion, or forced students to pay extension fees, sometimes as high as $999.
Finally, the FTC uncovered a deceptive incentivized review program employed by Career Step. The company incentivized students to post positive reviews on platforms like the Better Business Bureau (BBB), Google, and Trustpilot. Students were offered a free program extension of up to three months for posting reviews on each of these sites. They were instructed to provide proof of their reviews by sending screenshots or links back to Career Step. These incentivized reviews falsely presented themselves as genuine, unbiased opinions from ordinary, uncompensated Career Step students.
The proposed settlement, which is awaiting federal judge approval, mandates Career Step to pay $15.7 million for consumer redress. Additionally, the company must cancel approximately $27.8 million in debts owed by current and former students who enrolled between February 2020 and February 2023. The stipulated order also prohibits Career Step from engaging in deceptive advertising for any educational product or service.
Specifically, Career Step is now legally restricted from misrepresenting:
- Employment, hiring, or career prospects associated with their programs.
- The number or percentage of students who actually gain employment after program completion.
- Whether any individual obtained employment or a job specifically as a result of Career Step’s programs.
- Partnerships with any companies or employers for job placement.
- The nature and availability of career services.
- The availability and placement rates for externship programs.
- The typical or expected duration of any program.
- The total costs and terms of their educational programs or services.
- The objectivity or impartiality of any content, including reviews.
- Any material fact relevant to consumers regarding their services.
Furthermore, Career Step is required to notify all third-party platforms and websites hosting reviews written by students who received free services in exchange for those reviews. This notification must include a list of all such reviews with sufficient detail for easy identification. Career Step must inform these platforms of the FTC order and request the removal of these incentivized reviews as quickly as possible.
The Commission vote to file the complaint and stipulated final order was unanimous (5-0). The complaint and stipulated final order will be officially filed in the U.S. District Court for the Northern District of Georgia. Concurring statements were issued by Commissioners Melissa Holyoak and Andrew N. Ferguson.
The FTC staff attorneys involved in this case were Stephanie Liebner, Samuel Jacobson, Sally Tieu, and Michelle White, all from the Bureau of Consumer Protection.
NOTE: The Commission issues a complaint when it has “reason to believe” that defendants are violating or are about to violate the law and deems a proceeding to be in the public interest. Stipulated final orders become legally binding once approved and signed by a District Court judge.
