The Pennsylvania Attorney General announced that it reached a settlement with Temple University over charges that it improperly boosted the rating for its Fox Business School in ratings publications such as U.S. News & World Report. As part of the settlement, Temple agreed to provide $250,000 in new scholarships for students over the next decade.
Pennsylvania's Attorney General alleged that the school "intentionally and knowingly" submitted false information to U.S. News about the students in its online MBA program, which led to U.S. News improperly giving the program a #1 rating. (Previously, the program had been rated #28.) The Attorney General alleged that the school provided false information about the number of students that submitted GMAT scores, the mean undergraduate GPA of students, admissions selectivity, and other information. The Attorney General also alleged that the school "adopted questionable interpretations" of survey questions which the school was required to answer.
The Attorney General alleged that the school then promoted its false rating to prospective students through television, radio, print social media, website, and other advertising, which ultimately led to "a marked increase in the number of applicants, enrollees, and revenue."
Temple's settlement agreement with the Pennsylvania Attorney General requires the school to reform its data aggregation, collection, inspection, verification, and submission practices, provide consumers with accurate information about the school's ratings history, maintain proper oversight and training of its employees, and perform annual compliance assessments.
With the staggering cost of education, it's no surprise that schools are getting extra attention from regulators right now. (Just last week, I blogged about the FTC's action against the University of Phoenix.) Clearly, if you're marketing a school right now, this is a good time to make sure that your house is in order.
This case is also an important reminder that, if you participate in voluntary rating system, regulators may hold you responsible for the accuracy of the information that you provide -- and may charge you with false advertising if the rating was obtained improperly.
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
