Saint James School of Medicine – and its Illinois-based operators – will have to pay $1.2 million toward refunds and debt cancellation for students harmed by its deceptive marketing, according to a Federal Trade Commission (FTC) press release.
The FTC took action against the medical school and its operators for allegedly inflating its medical licensing examination pass rates, and residency match rates, in order to lure prospective students.
The FTC’s complaint alleges that the school misrepresented its U.S. Medical Licensing Examination (USMLE) Step 1 pass rate in sales calls, presentations, and marketing materials.
A brochure – distributed at the school’s open houses – claims a 96.77% first-time USMLE Step 1 pass rate. However, since 2017, the school’s actual pass rate was only around 35% for students who had completed the necessary course work to take the examination, according to the FTC.
The school also allegedly inflated its residency match rate, claiming it can offer a match rate similar to other American medical schools. According to the complaint, the school’s website stated that the match rate was 83%, and telemarketers were instructed to tell customers the match rate was 85% to 95%. In reality, since 2018, the match rate averaged only 63%.
The FTC also charged that the school failed to provide a Holder Rule notice in its credit agreements, which mandates that consumers are informed of their right to assert claims against any holder of the credit contract.
The complaint also alleges that telemarketers used high-pressure sales tactics to persuade prospective students to pay a $55 application fee, and a $1,000 reservation fee, in order to secure enrolment. Telemarketers were allegedly instructed to try to collect the reservation fee during their outreach, telling consumers they had only 48 hours to pay the fee or risk losing their spot at the school.
The FTC’s judgment against Saint James School of Medicine bans misrepresentation of the USMLE pass rate, residency match rate, and all unsubstantiated claims, and prohibits further violations of the Holder Rule and other regulations.
The stipulated order also imposed a $1.2 million judgment to settle charges that Saint James violated agency rules. The judgment will go towards refunds and debt cancellation for students who financed their education within the past 5 years. The FTC claims that it will reach out directly to anyone who is eligible.
The for-profit medical school has two Caribbean campuses: one in Anguilla and one in St. Vincent. From 2016 to 2020, about 1,300 students enrolled each year, at a cost of $6,650 to $9,900 per trimester. Brochures stated that 60% of students were African American, Asian, Hispanic, or Latino, according to the complaint.
The Anguillian reached out to Saint James School of Medicine, Anguilla, for comment and was advised to speak to the school’s management or administration in Chicago, United States. As at press time, no one could be reached for comment at the Chicago office.
The Anguillian newspaper was directed by FTC media contact Nicole Drayton, Office of Public Affairs, to the following link for accurate information: https://www.ftc.gov/news-events/news/press-releases/2022/04/federal-trade-commission-takes-action-against-profit-medical-school-using-deceptive-marketing-lure
