The College Network is facing scrutiny from government regulators. / Getty Images
It was a hard sell in a Starbucks.
The woman from Indiana was a licensed practical nurse hoping to earn a bachelor's degree - and move on to a higher-paying nursing career. The salesman, from The College Network, had pitched the company as a relatively cheap and fast route to a degree from Indiana State University.
TCN sells online test preparation materials and academic support for customers to pass equivalency exams for college credit. Customers often commit to large up-front purchases of material for several exams. But the woman said the salesman left out that she would have to apply separately to Indiana State and might not be accepted. She recalled that he was impatient and said he was in a hurry. He just needed her signature on some documents.
More than two years later, a letter from attorneys for a collection agency arrived. It said she owed more than $9,000.
The woman - whom The Star is not naming to protect her from possible retribution - said she thought she had canceled the contract she signed that day at Starbucks. Now she's among hundreds who've complained to state attorneys general and the Federal Trade Commission about TCN, a for-profit Indianapolis company operating out of a northside office building.
In public records and interviews, a Star investigation found more than 200 consumer complaints about TCN filed to the Indiana attorney general since 2013, plus almost 100 in Ohio, Texas and Florida. They allege deception or outright fraud by salesmen, and high-pressure sales tactics to entice people to sign for thousands of dollars in up-front purchases financed by long-term personal loans.
The company denied those allegations in written responses to questions from The Star, saying the people complaining are a tiny percentage of its customers.
The FTC and the Indiana attorney general's office are investigating TCN. Terry Tolliver of the Indiana attorney general's office told The Star he's "concerned about the volume of complaints." Last week, a class action lawsuit against TCN was filed in Ohio.
Michael Berler, an attorney in the case, described TCN as "a predatory sales and marketing machine to extract money from hard-working people looking to better themselves."
Documents reviewed by The Star described TCN customers who complained generally as "economically challenged but ambitious" and "already insecure, just trying so hard to do the right thing to get an RN."
Beyond the FTC investigation and lawsuit, the Star found:
â?¢ Two officers of TCN are also listed as officers of a Las Vegas collection agency. According to TCN, the company, American Credit Exchange, "has involvement when a customer defaults."
â?¢ The owner of TCN, Gary L. Eyler, and his national truck driving school were sued by the federal government in 1988 for $366 million on allegations of fraud and poor training. The school's students had a very high default rate on government-backed student loans. The company later settled - for $50,000, TCN said - but went bankrupt and closed.
In Indiana, the law allows little of consumer complaints to be released publicly. But a review of numerous cases in Ohio, where much more of the record is available, showed TCN settling with people who complained to the attorney general. The company forgives remaining debt but keeps what it had already been paid, saying the person retains an "educational credit" with the company.
The person is also required to sign a confidentiality agreement. Several people who complained to the Indiana attorney general were contacted by The Star and said they couldn't talk about TCN because of the agreement.
TCN declined an in-person interview with The Star, but agreed to have company vice president Mark Ivory answer written questions.
He wrote that the company has had about 200,000 customers since incorporating in 1995. The voluntary settlements brokered by attorneys general show TCN's "good faith rather than being an indication of anything wrong."
According to Ivory, the company has been through an FTC investigation before, "more than 15 years ago," which resulted in no action and it "expects the same result here."
He wrote that Eyler was dismissed from the government's $366 million lawsuit.
TCN also pointed The Star to video testimonials of happy customers who generally extolled the advantages of online learning.
Amanda Farmer, who earned an associate degree in nursing, said in a video, "I feel like when I do call (TCN), they really do care about how well I'm doing - or if I'm doing well. Or if I'm having trouble, how can they make it better. ... I have no complaints about the program, the materials, the staff, anything. This is the only way I could have done it, really."
Others had different experiences.
'Stunned and tearful'
TCN is not a school. In certain places on its website and in contracts, the company says that. But in interviews, court documents and complaints to attorneys general, numerous people reported being confused or misled.
There are five accredited "university partners" listed on TCN's homepage, including Indiana State and Purdue.
Two of the other "university partners" appear to have a loose, at best, connection to TCN. A spokesman for Lake Superior State in Michigan said his school ended its contract with TCN three years ago but retains an informal "partnership." He said the school has had three or four referrals from TCN over the past three years.
A spokeswoman for Empire State University of New York said it has had an agreement since 2012 for TCN to use the school's logo on its website. Since then, she said, two students applied to the school from TCN but neither enrolled.
Confusion about TCN's role can be costly. In a complaint last year to the Texas attorney general, a woman from San Angelo, Texas, said of her salesperson: "What she talked me into â?¦ purchasing (was) $6,000 dollars worth of study guides."
Court records reflect tension for several years between Excelsior College of Albany, N.Y., and TCN. Excelsior is an accredited, non-profit school with an online nursing program. It has no relationship with TCN.
The records include capsules of 65 phone calls about TCN to Excelsior's admissions department in 2008.
A woman from Greenwood claimed she had been misled that there's a connection between Excelsior and TCN, and that "she spent $3,000 for nothing, and that they sold her materials for exams she didn't need."
A woman from Columbus, Ga., "had absolutely no idea that we are not one in the same as TCN. She was stunned and tearful."
TCN's "comprehensive learning modules" cost $615 each. The class action lawsuit describes them as "essentially abridged or shorter textbooks for a course ... along with a PowerPoint or animated presentation of the same material with a voiceover, and some practice tests." The lawsuit claims that study materials for equivalency exams, including sample questions, can be found in books for less than $20.
Excelsior's website has a page devoted to test preparation services. It says the school has its own material to help students prepare independently for exams, and that "these resources, and your desire to learn, are usually all that you will need to succeed."
Ivory's statement said TCN customers receive value from working at their own pace, with an extensive introduction to the program and "comprehensive" academic support. Help is a phone call away, he wrote. But complaints to attorneys general included criticism of the academic support falling far short of what was sold.
Numerous complaints referred to TCN's sales tactics.
TCN has "program advisors" who sell the company's "comprehensive learning modules," often for aspiring nursing students. In a 2010 court document, TCN said the salesmen receive commissions of 15 to 20 percent and that contracts range from "several thousand up to almost 10."
A 2013 letter from Excelsior's lawyer to TCN's lawyer said, "You should be aware that I continue to receive reports of complaints from students and potential students of Excelsior College that TCN staff effectively misrepresent their relationship with the College and generally engage in high pressure tactics to close sales for test preparation services."
A woman from Lewisburg, Ohio, complained last year to the Ohio attorney general that in 2011, after being led to believe she had to enroll with The College Network to get into Excelsior, she was "pressured into signing his documents."
In court documents filed last year in Riverside County, Calif., a woman said she met a TCN representative at a Starbucks, where he presented several documents to her. She signed. But, she claimed, "At no time did the program advisor draw my attention to the back side of any page nor did the back side of any page require me, or the program advisor, to fill in any information."
The back, she said, included an agreement that any disputes must be settled by arbitration in Marion County, Ind. The case was settled in May.
A woman in Sacramento County, Calif., complained to the Indiana attorney general in June of this year after her wages started being garnished. She told The Star she signed up with TCN after being recruited by a company representative who "kind of hung around the grassy picnic area" of her school. The representative later visited her home.
Excelsior's website says specifically that it "does not send authorized representatives to a student's home."
TCN attracted the attention of Indiana's attorney general in 2004. The company signed an "assurance of voluntary compliance"outlining detailed requirements for notifying customers in Indiana about when and how they can cancel, and how soon refunds must be delivered. It mandated contract cancellations and refunds for two people.
Loans and collections
Credit comes easily through TCN, customers said in interviews, court documents and complaints to attorneys general.
"Looking back, I should have known something was off when they didn't run (credit reports)," said the Indiana woman who wanted a degree at Indiana State. "They said, 'Just sign here and get a loan.'"
A court document filed in an Arkansas bankruptcy said the TCN "program advisor" filled out the company's purchase agreement for learning modules and then "proceeded to fill in the blank spaces" on the loan papers.
The document said the woman had no contact with the lending institution before signing the papers. She signed for a $9,700, 60-month loan at 12 percent interest.
"The fact that financing is readily available is a great convenience to our customers, a large majority of whom are professionally employed working adults," Ivory wrote.
The loans, however, are not student loans with deferred payments. They are personal loans and the payments begin immediately.
Asked why customers must commit to buying so many "learning modules" up front, Ivory wrote that TCN's programs are for people "truly committed to achieving their educational goals."
When customers default, TCN buys back the debt and assigns it to American Credit Exchange, where Eyler is also listed as an officer. That surprised Jack Turman, dean of Indiana State's nursing school for less than a year.
"Really?" Turman said. "Then they go after the people? Yikes."
Several collection agencies showed up in the records reviewed by The Star, apparently having been sold the debt.
A woman from Mayo, Fla., reported to her state's attorney general last year that a collection agency went after her for $5,000.
She reported receiving threats of wage garnishments, phone calls to her employer and being "verbally mistreated ... by collection agents making me feel criminal." The woman wrote that TCN's program adviser said the company was affiliated with Excelsior.
She wrote that her "only crime was the dream of being better prepared to care for my patients!"
State schools and TCN
The trademarks and names of Indiana State and Purdue are included in TCN videos and on its website. Both universities profit from their partnership.
TCN pays Indiana State for developing material that TCN sells to customers. ISU receives a percentage from each "study program" sold.
Purdue's relationship with TCN involves non-credit, non-degree classes called Lean Six Sigma, for improving business processes. Purdue was not mentioned in any complaints reviewed for this story.
Both Indiana State and Purdue say they have not received any complaints from their students about TCN. Indiana State has been named in at least two lawsuits with TCN since 2011 and is mentioned several times in complaints to attorneys general. Indiana State was dismissed from both of the lawsuits.
Berler, the class action attorney in Ohio, said whether or not the universities have received complaints they are part of the problem. Their partnership - trumpeted by TCN - can be compelling evidence to someone trying to assess the company's validity and value.
"They are legitimizing the scam," Berler said, "and profiting from it."
Purdue officials declined to be interviewed by The Star, but issued a statement that said the school is "currently evaluating its relationship with The College Network to ensure it meets our students' needs, advances our educational mission, and aligns with our focus on affordability and accessibility."
Melony Sacopulos, Indiana State's general counsel, declined to comment specifically on The Star's findings, but acknowledged the FTC had requested documents about TCN from the university.
Sacopulos told The Star that depending on the outcome of the FTC investigation and class action lawsuit the school would "likely" reassess its relationship with TCN.
Contact Mark Alesia at (317) 444-6311, email@example.com and @markalesia.
Read the original story: Test preparation or predator? The College Network scrutinized in several states