Avoid the Next Trump University: 6 Signs a School is a Scam
The reviews are damning. Students who enrolled at Trump University, a for-profit profit real estate training program that went out of business in 2010, called the program “an absolute, utter waste,” “extremely deceptive,” and “useless,” according to complaints filed with the Federal Trade Commission and published by Gizmodo.
Former Trump University employees — which wasn’t a true university, as it didn’t award degrees — were even more pointed in their criticism. Ronald Schnackenberg, who worked as a sales manager for the school, called it a “fraudulent scheme” that “preyed upon the elderly and uneducated to separate them from their money,” in court testimony related to a lawsuit filed by former students.
Fees for the training program, which promised to teach people how to flip properties and become successful real estate investors, started at $1,495 and ran as high as $34,995. Employees claim they were told to target vulnerable people and encourage students to max out credit cards to pay the tuition. Some instructors apparently had no experience in real estate.
Disgruntled students in California, Florida, and New York are now seeking damages from Trump University. Whether they’ll eventually get some of their money back remains to be seen, but in the meantime, there are some valuable lessons for the rest of us in their story. The people who signed up for classes with Trump University really believed they were going to get something valuable out of the experience, as do most people who decide to pursue some education or training, whether it’s a one-day seminar or a four-year degree. Unfortunately, there are people who are willing to take advantage of your desire to make a better life for yourself. Here are some warning signs that the school or training program you’re considering is actually a scam.
1. The school isn’t accredited
If you’re hoping to earn a degree, make sure the school you’re attending is accredited by an organization recognized by the U.S. Department of Education or the Council for Higher Education Accreditation, (CHEA), Tim Willard, a spokesman for CHEA, told U.S. News and World Report. Accreditation ensures the school meets basic standards. If you earn credits from an unaccredited school they may not transfer to other colleges, while employers may view degrees from these schools with skepticism.
2. You don’t have to do any work
According to John Bear, an expert on diploma mills, there are more than 500 schools selling fake degrees online. These schools let you “earn” a degree by forking over cash in exchange for an impressive-sounding piece of paper. They might offer credit for life experience and not require you to take any classes. (While some legitimate schools do offer some credit in exchange for your work experience, you won’t be able to earn your entire degree that way.) “If you’re getting a degree without doing any work, chances are you’re dealing with a diploma mill,” the FTC warned.
3. Pushy sales tactics
Testimony in the Trump University lawsuit revealed that employees were encourage to use high-pressure sales tactics to get people to sign up for more expensive courses. Now-defunct Corinthian Colleges was also accused of using high-pressure sales tactics to convince students to enroll in its shoddy and expensive training programs. A hard sell from a school’s representatives, like aggressive phone calls or being told you must make a decision immediately, is a big red flag when you’re considering enrolling, and the FTC warns prospective students to watch out for these tactics.
4. Promises a “guaranteed” job
Recruiters at scam schools may make extravagant promises to convince you to sign up for classes. If the admissions representative tells you you’re guaranteed to get a job after completing the training, promises an extremely high income, or a 100% job placement rate, be cautious. “No school can guarantee that you will get a job after completing their program, even in the best of economic times,” the Massachusetts Attorney General’s office warned, adding that job placement and income statistics can be tweaked to look better than they really are.
5. The school has a “soundalike” name
Scam schools may have prestigious-sounding names very similar to those of well-known, legitimate institutions. Or they might include a word like “state,” implying they’re public universities. In the 1980s and 1990s, thousands of people bought degrees from a bogus school called Columbia State University, which sounded suspiciously like a certain Ivy League school in New York City. On its list of schools offering “fraudulent or substandard” degrees, the state of Texas includes other soundalike institutions like Oxford Trent University, Oxford International University, University of Santa Barbara, and Pacific Yale University.
6. The class is really a sales pitch
One-day classes, seminars, or training programs promising to teach you how to make a fortune in real estate or investing are sometimes just a thinly veiled advertising pitch. Get Motivated Business Seminars lured people in with cheap tickets and famous speakers, only to try to sell them on pricier workshops and classes, according to a report in the Seattle Times. The Better Business Bureau has also warned again real estate seminars that mostly serve to empty your wallet. You should also be skeptical of “free lunch” investing classes and seminars, according to FINRA, where you’re treated to a complimentary meal in exchange for financial “education” – and a sales pitch.