Court Holds National Student Financial Aid in Contempt: Defendants Violated Terms of a 2003 Court Order

Defendants Must Pay Redress to Dissatisfied Consumers

Share This Page

For Release

A U.S. district court judge has held Integrated Capital, doing business as National Student Financial Aid (NSFA), and its principal, Alan Wilson, in contempt for violating terms of an August 2003 stipulated final order requiring them to make certain disclosures in connection with the marketing and sale of academic goods or services. In a ruling from the U.S. District Court for the District of Nevada, Judge David Hagen ordered NSFA and Wilson to offer full refunds to all consumers who purchased NSFA’s services between August 6, 2003 and July 17, 2004.

In August 2003, the Federal Trade Commission filed a complaint and stipulated order settling charges that NSFA misrepresented its college financial aid services. The order, approved by the court, required the defendants to make certain affirmative disclosures in their oral sales presentations, including that: (1) purchasing NSFA’s services did not guarantee that a consumer will get financial aid or get more financial aid than the consumer otherwise could have obtained without purchasing NSFA’s services; (2) purchasing NSFA’s services did not guarantee that a consumer’s child will be accepted by any college or university; (3) NSFA provided no services until it received a completed questionnaire, that certain services had to be specifically requested, and that failure to utilize any services did not entitle consumers to a refund; (4) consumers might not realize the full benefit of NSFA’s services if their children were within six months of graduating from high school, had not made reasonable efforts to complete necessary paperwork for admissions and financial aid, or were only considering attending community college; and (5) consumers who were not U.S. citizens might not be eligible for federal or state financial aid.

In its order finding the defendants in contempt, the court found that they “failed miserably” to make the affirmative disclosures during NSFA’s sales presentation. The court stated that the affirmative disclosures were included in the stipulated final order because they related to the core areas of the defendants’ business practices that attracted the FTC’s attention in the first place. The court found that the defendants’ contention that the placement of the affirmative disclosures at the conclusion of the individual “table talk” meetings satisfied the stipulated final order was without merit. The disclosures must be made during the sales presentation, not after consumers have already decided to purchase defendants’ services, the court ruled.

As a sanction for the defendants’ contemptuous behavior, the court ordered them to contact all consumers who purchased their services between August 6, 2003 (the date of entry of the stipulated final order), and July 17, 2004, and offer a full refund to those consumers dissatisfied with NSFA’s services. The FTC estimates these refunds will total over $2 million. The court, however, did not grant the Commission’s motion to modify the stipulated final order to ban the defendants from selling academic goods or services in the future, stating that the defendants’ behavior did not warrant a ban, “at least not yet,” according to Judge Hagen.

The FTC has set up a consumer hotline number, 202-326-2880, for consumers with questions about the court’s order or the refund program.

Copies of the order imposing final civil contempt remedies are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at . The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC Matter No. X030079)
(Civil Action No. CV-N-03-04120DWH (RAM))

Contact Information

Media Contact:
Brenda Mack
Office of Public Affairs
Staff Contact:
Reilly Dolan
Bureau of Consumer Protection