FTC Charges Education Lead Generator with Tricking Job Seekers by Claiming to Represent Hiring Employers

In the agency’s first enforcement action against an education lead generator, operators of Gigats.com have agreed to settle Federal Trade Commission charges that the company claimed it was “pre-screening” job applicants for hiring employers when it was actually gathering information for other purposes, including lead generation for post-secondary schools and career training programs.

According to the FTC’s complaint, the operators of Gigats.com gathered online job announcements posted by multinational companies, government agencies and other employers, and summarized them on its website, which appeared to accept applications for the jobs. Many of the job openings were not current, and for those that were, the employers had not authorized Gigats to collect applications or screen or interview applicants. In addition, the defendants never sent the information they collected from consumers to the employers.

Instead, the FTC alleges, consumers, who had provided Gigats with the kinds of personal information typically requested in a job application, were directed to call the defendants’ “employment specialists,” who then steered the consumers toward enrolling in education programs that had paid the defendants for consumer leads. Many consumers also were transferred to the defendants’ “education advisors.” The FTC alleges that these so-called advisors falsely claimed to be independent education advisors but in fact only recommended schools and programs that had agreed to pay the defendants, typically from $22 to $125, for consumer leads that met their enrollment requirements.

Under a proposed stipulated court order, the defendants are prohibited from making misrepresentations like those described in the complaint, and promoting job openings without a reasonable basis to expect that employers are currently hiring for those jobs. They also are barred from transferring consumers’ personal information to third parties without clearly disclosing that it will be transferred, and their relationship with the third party. In addition, the defendants are prohibited from using the information covered under the order unless consumers affirmatively opt in to their services.

The proposed court order imposes a $90.2 million judgment that will be suspended upon payment of $360,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The defendants are Expand Inc., also doing business as Gigats, EducationMatch and SoftRock Inc., and Ayman A. Difrawi, also known as Alec Difrawi and Ayman El-Difrawi.

The Commission vote authorizing the staff to file the complaint and proposed stipulated court order was 3-0. The proposed order has been submitted to the U.S. District Court for the Middle District of Florida.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.

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