Southeast Financial Credit Union Will Pay $2.25 Million in Refunds to Duped New Yorkers, Clean Up Any Negatively-Affected Credit Ratings.
New York, NY - April 11, 2018 - Attorney General Eric T. Schneiderman today announced a settlement with Tennessee-based Southeast Financial Credit Union, which was named in the Attorney General’s June 2015 lawsuit against The College Network and its owner Gary Eyler, among others. The settlement with Southeast Financial Credit Union secures $2.25 million in refunds for duped New Yorkers and requires the credit union to clean up any students’ negatively-affected credit ratings.
The suit charges The College Network with inducing prospective nursing students to pay thousands of dollars for ineffective study guides through false and deceptive business practices – including preying on as many as 2,000 New York consumers who sought to obtain associate degrees in nursing. Using misleading advertising and high pressure sales tactics, The College Network also created the false impression that it was offering online nursing degrees and that it was affiliated with Excelsior College, an accredited institution based in Albany that offers such degrees.
The lawsuit also charges that, through an agreement with The College Network, Southeast Financial Credit Union provided financing to many of The College Network’s customers. As required by federal law, Southeast Financial Credit Union’s loan agreements provided that the credit union, as the holder of consumer credit contracts, is subject to all claims and defenses that consumers may have against The College Network.
“Students across the country are already struggling under mountains of debt and fees – they shouldn’t have the added worry of being ripped off by deceptive scammers hawking ineffective study guides,” said Attorney General Schneiderman. “My office will continue to aggressively pursue those who mislead and exploit New Yorkers who are simply seeking an education to better their lives and communities.”
In addition to paying $2.25 million, which will be distributed to eligible consumers who financed their purchase from The College Network through the credit union, the settlement requires Southeast Financial Credit Union to clean up the credit of any New York consumers who received negative marks on their credit report from the credit union.
The settlement resolves the specific lawsuit against Southeast Financial Credit Union. The lawsuit, which is pending in Albany County Supreme Court, will continue against the remaining parties.
In the coming months, the Attorney General’s office will be mailing claim forms to consumers who are potentially eligible to receive a refund pursuant to the settlement. Consumers who have questions about the settlement can call the Attorney General’s consumer helpline at 1-800-771-7755.
This investigation is being handled by Assistant Attorneys General Amy Schallop and Emily Auletta, under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia of the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is overseen by Executive Deputy Attorney General of Economic Justice Manisha M. Sheth.