PA Attorney General Corbett Announces $200,000 Settlement in Lehigh Valley College...

Wed Feb 20, 2008 9:58am EST

* Reuters is not responsible for the content in this press release.

PA Attorney General Corbett Announces $200,000 Settlement in Lehigh Valley
College Probe; Funds Will Support New Statewide Education Program for Consumer
Credit Issues

HARRISBURG, Pa., Feb. 20 /PRNewswire-USNewswire/ -- Attorney General Tom
Corbett today announced that the Attorney General's Bureau of Consumer
Protection has reached a $200,000 settlement with the two parent companies for
Lehigh Valley College, located near Allentown, resolving allegations that the
school misrepresented information about student loans, job-placement and the
ability to transfer credits to other institutions.  

"This consumer settlement will ensure that students receive accurate
information and full disclosure about financial aid, the ability to transfer
credits to other schools and the likelihood of finding work following
graduation -- all key issues in a student's selection of a school," Corbett
said.  "Additionally, the civil penalties and costs included in this
settlement will be used to help launch a new statewide education program about
consumer credit, helping every Pennsylvania family make wise choices about
college financing, credit cards, home loans and other financial issues."

Corbett said the Assurance of Voluntary Compliance (AVC) covering the conduct
at Lehigh Valley College was reached with Allentown Business School Ltd. and
Illinois-based Career Education Corporation, which owns Lehigh Valley College
and numerous other for-profit schools across the country; including the
Katherine Gibbs School, in Norristown, Montgomery County.

Corbett said the consumer settlement resolves allegations that Lehigh Valley
College rushed students through the loan financing process, failed to disclose
terms of student loans, made inflated claims about its ability to place
students in jobs following graduation and misrepresented the ability of
students to transfer credits to other schools.

According to the AVC, the owners of Lehigh Valley College are required to pay
$50,000 in civil penalties for alleged wrong doing.  They are also required to
take the following steps to ensure that students receive accurate information:

-- No false or misleading statements about future employment opportunities.

-- No false or misleading statements about the ability to transfer credits to
other schools.

-- Clear and detailed disclosures about student loans and student financial
aid.

-- Clear disclosures about the selection of lenders for any "preferred lender
lists."

-- Fully comply with Pennsylvania's Consumer Protection Law.

"This case sends a clear message that we will vigorously investigate any
allegations of deceptive marketing or unfair trade practices involving schools
and colleges operating in Pennsylvania," Corbett said.  "Additionally, this
settlement will benefit every college-bound student, every family and every
consumer in Pennsylvania -- helping to better educate and inform all state
residents about essential financial issues."   

Corbett said that the settlement includes $150,000 in costs, which will be
used to create a statewide consumer education program about financial issues,
including a new "Your Money" section of the Attorney General's website
(http://www.attorneygeneral.gov).  The education program and interactive
website will include information on college financial aid, mortgage lending
and refinancing, credit cards, predatory lending, debt collection and other
common topics of financial complaints.

The new consumer financial education program and interactive financial website
are expected to be launched in June 2008.

Corbett noted that credit issues impact every Pennsylvania household and
generate a regular flow of complaints to the Attorney General's Office.

"Every year, consumer credit issues are typically the number one topic for
complaints to the Attorney General's Bureau of Consumer Protection," Corbett
said. "Last year alone, we received more than 7,500 complaints, spanning a
wide range of credit problems -- from disputes over loans and credit cards to
difficulties with credit ratings and debt collectors."

The Assurance of Voluntary Compliance was filed on Tuesday, February 19, 2008,
in Lehigh County Court of Common Pleas by Senior Deputy Attorney General
William A. Slotter, of the Attorney General's Bureau of Consumer Protection.


(The Signing of an Assurance of Voluntary Compliance is not considered an
admission of violation of the Consumer Protection Law.)

Editors' Note: A copy of the Assurance of Voluntary Compliance is available by
contacting the Attorney General's Press Office at 717-787-5211.

CONTACT: Nils Hagen-Frederiksen
Deputy Press Secretary
717-787-5211
nhf@attorneygeneral.gov


SOURCE  Pennsylvania Office of Attorney General

Nils Hagen-Frederiksen, Deputy Press Secretary for Pennsylvania Attorney
General Corbett, +1-717-787-5211, or cell, +1-717-319-2252,
nhf@attorneygeneral.gov
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