Ore. settles deceptive marketing to vets

Oregon Attorney General John Kroger announced Tuesday a multistate settlement with QuinStreet, Inc. over allegations that the California-based company unlawfully targeted military service members through some websites that misleadingly appeared to be operated, owned or endorsed by the U.S. government or U.S. military.

“This office will not tolerate companies that mislead the brave military service members who fight for our country,” said Keith Dubanevich, associate attorney general.

QuinStreet owns an expansive network of websites that generate leads primarily for the for-profit education industry. The multistate enforcement action arose in conjunction with a larger ongoing effort by state attorneys general looking into the recruiting and deceptive business practices of some for profit colleges.

Oregon served on the executive committee for the investigation into several of Quistreet’s educational websites that appeared specifically designed to market products and services for military service members.

The investigation determined that the sites misleadingly gave the impression that the schools immediately listed as “eligible GI Bill schools” were the only schools at which the veterans’ benefits could be used.

Consumer advocates and state Attorneys General have seen for-profit colleges intensify their recruitment of veterans since 2008, when Congress enacted the Post 9/11 GI Bill, which made billions of dollars in educational benefits available for veterans and their families.

According to a February 2011 General Accounting Office report, $9 billion in educational benefits were provided to service members and veterans in Fiscal Year 2010.

Of 20 for-profit colleges analyzed by the U.S. Senate HELP Committee, total military educational benefits increased from $66.6 million in 2006 to a projected $521.2 million in 2010.

Part of the reason why military members are attractive to for-profit colleges is because their benefits don’t count toward the business’ 90 percent cap on federal Department of Education funding.

As part of the settlement filed Tuesday, QuinStreet will relinquish ownership and control of the domain GIBill.com to the Department of Veterans Affairs, which will use it to promote the GI Bill program and educate service members about the benefits available to them under the program.

In the future, the company must clearly disclose that its sites are not associated with the U.S. government and unequivocally state that companies appearing on certain websites are not the only schools that accept GI Bill benefits.

The company will also pay $2.5 million to the settling states, including $225,000 for Oregon.