Student Marketing Group Settles With FTC

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Less than a month after settling a similar lawsuit, Student Marketing Group Inc. and the Educational Research Center of America said yesterday that they settled a deceptive-trade-practices claim with the Federal Trade Commission.

The FTC alleged that the organizations used deceptive practices in the collection of student information by not disclosing that the data would be used to market non-educational products and services.

Student Marketing Group, which specializes in data for the child and young-adult markets, has used its not-for-profit arm Educational Research Center of America to distribute surveys funded by the company to teachers yearly since 1999.

Accompanying the surveys were cover letters explaining that data collected would be used by universities and colleges as well as financial aid and student scholarship agencies. However, the data were sold and used to market non-educational products and services, a use not disclosed in the letter.

While the list brokerage and nonprofit settled to avoid litigation, neither admitted to any wrongdoing or violation of law. They did agree to ensure that future efforts to collect personally identifiable information include specific disclosures that the information may be used for non-educational marketing purposes. No penalties were paid, according to the firms.

"We are pleased to put this issue behind us," Jan Stumacher, president of Student Marketing Group, Lynbrook, NY, said in a statement. "We believe that the settlement reflects our view that there was no attempt to mislead students, but simply a disagreement over the level of detail that should be provided in connection with the collection of information."

The FTC could not be reached for comment.

The organizations reached a similar settlement with the New York state attorney general Jan. 8.


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