FTC shuts down high school diploma mill that took $11M

An alleged diploma mill that collected more than $11 million from consumers who thought they were getting a usable high school diploma was shut down by a federal judge at the request of the Federal Trade Commission, the agency said on Friday.

The assets of Diversified Educational Resources, LLC, and Motivational Management & Development Services, Ltd., were frozen. The FTC said the diplomas had been sold for $200-$300 since 2006.

Those seeking diplomas were given a multiple choice test and then, after paying, were awarded a diploma that consumers were told was legitimate. Among the names of schools on the diplomas were Jefferson High School Online and Enterprise High School Online.

"A high school diploma is necessary for entry into college, the military, and many jobs," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "These defendants took students' money but only provided a worthless credential that won't help their future plans."

The FTC charged the businesses and owners with violating federal law by "misrepresenting that the diplomas were valid high school equivalency credentials and that the online schools were accredited." The accrediting organization cited on the website that sold the diplomas was made-up, the FTC said.

And the FTC cited this marketing language as further evidence of the deception: "So you have to ask yourself, do you want an [sic] diploma or just a certificate like the GED? For a real diploma, you would prefer our system over the other," adding, "as any online search will tell you, many colleges or employers don't accept certificates based on the GED Test."

The immediacy of awarding a degree, overly aggressive advertising claims, lack of schoolwork, and the charging of a flat fee are all warning signs of diploma mills, the FTC said.

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.