The Federal Trade Commission has negotiated a settlement agreement under which a Michigan firm and two of its officers, charged in June with deceptively marketing employment services for airline jobs nationwide, have agreed to pay $350,000 into a fund for consumer redress. Under the settlement, Careers, Inc., of Southfield, and Daniel T. Faulkner and Nicholas S. Mancino also would be bound by provisions prohibiting them in the future from claiming that they are affiliated with airlines, that consumers are likely to obtain jobs in their chosen geo graphic areas, and other false statements to induce consumers to purchase their employment services. The settlement also would require Faulkner and Mancino to post a $250,000 perfor mance bond for the protection of future clients before getting involved in an employment service business like Careers, Inc. where consumers pay a fee.
The FTC filed charges against Careers, Inc. as part of Project Career Sweep, a crackdown on fraudulent employment services scams that charge consumers up-front fees ranging from $35 to hundreds of dollars, but supply very little of value, if anything, in return. The FTC said these firms place ads in the classified sections of newspapers nationwide touting positions such as "financial analyst" and entry-level positions with airlines. When consumers call the toll-free numbers in the ads, telemarketers hype themselves as job placement services with special access to specific job openings. But few, if any, consumers ever receive the type of job placement assistance promised, and the vast majority of consumers never see their money again. Some red flags, the FTC said, are when a firm charges an up-front fee and guarantees consumers a job, and when it requires credit or bank account information while promising that no immediate charges or debits will occur.
In documents filed with the court in the Careers, Inc. case, the FTC said the defendants led consumers to believe that the firm was affiliated with one or more airlines, that it had special access to job openings, and that consumers who purchased Careers, Inc.’s services for $135 would soon be employed in their chosen geographic areas. Telemarketers also promised con sumers a refund if they were dissatisfied. Consumers who purchased the firm’s services got a general employment application, some background information on the airline industry, and a newsletter with job listings. Few if any obtained jobs in their chosen areas, the FTC charged, adding that the firm was not in fact affiliated with any airline, and that it did not refund all or nearly all of dissatisfied consumers’ fees in most instances.
The consent agreement the defendants have signed with the FTC to settle these charges would prohibit them from making any material false or misleading statement in connection with offering an employment service, and includes a list of specifically-barred claims of the type that led to the FTC enforcement action. The agreement also would require the defendants to disclose any limitation or condition on any refund policy either before they solicit money from con sumers, or at the same time. Faulkner and Mancino each would be required to post a bond (or establish an escrow account) in the amount of $250,000 before participating in any way in an employment service (they could obtain a single bond if participating together in a single busi ness). This money could be used for refunds to customers should the defendants be found to engage in deceptive practices similar to those alleged in this case.
The $350,000 in redress required by the settlement already is being held in an escrow account. If practicable, the funds will be used for distributing refunds to Careers, Inc.’s clients. Otherwise, the funds will be deposited in the U.S. Treasury.
The consent agreement also contains various reporting and record keeping provisions that would assist the FTC in monitoring the defendants’ compliance.
The Commission vote to approve the consent agreement for filing in court was 5-0. It was filed in U.S. District Court for the Eastern District of Michigan, Southern Division (in Detroit), today. It requires the court’s approval to become binding.
NOTE: This consent agreement is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent agreements have the force of law when signed by the judge.
Copies of the documents associated with this case and other materials associated with Project Career Sweep are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases, related documents and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
Bonnie Jansen or Claudia Bourne Farrell,
Office of Public Affairs
202-326-2161 or 202-326-2181
John Mendenhall, Brenda Doubrava or Brinley Williams
Cleveland Regional Office
668 Euclid Avenue, Suite 520-A
Cleveland, Ohio 44114
(FTC File No. X960072)
(Civil Action No. 96 72710)