DETROIT (CN) – ComputerTraining.com took more than $5 million in tuition from students in 14 states, charging as much as $28,000 apiece, then abruptly shut down without offering refunds, a class action claims in Federal Court. Twenty named plaintiffs say CRCI Corp. promised “world-class information technology training,” and job placements, then “siphoned massive amounts of student loan funds” from students’ accounts with Sallie Mae and other loan companies.
ComputerTraining.edu, operated by CTCI, and its affiliate ComputerTraining.com, claimed to be “one of the nation’s most successful educational institutions,” the students say.
ComputerTraining advertised nationwide on radio, television and the Internet. It promised students they could earn Microsoft certifications through its 6-month program, credentials as an “IT professional,” and long-term access to career services, the students say.
Prospects were solicited by ComputerTraining’s so-called “admissions representatives,” who were actually trained salespeople, the students say.
Students say ComputerTraining demanded tuition in advance, except for students who got loans through Sallie Mae, who had to pay only half of the tuition up front. Tuition for ComputerTraining’s programs was up to “as much as $28,000 or more,” and most students found themselves “obtaining one or more student loans, borrowing money from family or friends, or tapping into savings, such as IRAs and 401(k) accounts” in order to enroll, the class claims.
ComputerTraining promised in its course catalogs that it would provide full refunds to students if the school closed before their training was completed, the class says. But they add that ComputerTraining had an “unconscionable clause” in its enrollment agreement, requiring students “as far away as Missouri, Georgia, Michigan, Kansas and other states” to arbitrate complaints in Baltimore.
Another provision prevented students from bringing a representative or class action against the company, the class says.
In 2009, despite ComputerTraining’s financial trouble with its lender, Branch Banking & Trust, the company “launched an admissions push,” hiring more salespeople, slashing tuition rates, and “enrolling as many students as possible,” all the while knowing that it could not provide the services it was selling, the class says.
Students say that on Dec. 31, 2009 they received an email from ComputerTraining saying that all of its schools and corporate offices had been closed by the Branch Bank without warning, and that students would receive refunds.
The class says ComputerTraining had taken millions of dollars in tuition from students’ accounts just days before shutting down.
The students were left with “partially completed educations, massive student loan debt and nothing to show for the time and money they had invested,” according to the complaint. And the students say they have not received any refunds from ComputerTraining, as promised.
The class demands damages for negligence, breach of fiduciary duties, negligent misrepresentation, unjust enrichment, breach of contract, fraud and civil conspiracy.
Lead counsel is Dean Googasian of Bloomfield Hills.