The FTC charged an education lead generator with tricking job seekers by claiming to represent hiring employers.
This settlement bans operators of Gigats.com from deceptive lead generation tactics.
In the agency’s first enforcement action against an education lead generator, operations of Gigats.com have agreed to settle charges made by the Federal Trade Commission that the company claimed it was “pre-screening” job applicants for hiring employers when it was in fact gathering information for other purposes, including lead generation for post-secondary schools and career training programs.
According the the 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 interview applicants. In addition, the defendants never sent the information they collected from the consumers to the employers.
Instead, there are allegations that consumers who 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 agreed to pay the defendants, typically between $22 to $125, for consumer leads that met their enrollment requirements.
Under a proposed stipulated court order, the defendants were 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 imposed 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, EductionMatch 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 complain 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.