A Caribbean medical school is in hot water with the Federal Trade Commission (FTC) for allegedly inflating its medical licensing exam pass rates and residency match rates in order to lure prospective students.
Saint James School of Medicine — and its Illinois-based operators — will have to pay $1.2 million toward refunds and debt cancellation for students harmed by its deceptive marketing, according to an FTC press release.
“Saint James lured students by lying about their chances of success,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement.
FTC’s complaint alleges that the school misrepresented its U.S. Medical Licensing Examination (USMLE) Step 1 pass rate in sales calls, presentations, and marketing materials.
One brochure claimed a 96.77% first-time USMLE Step 1 pass rate — but the school’s actual pass rate is around 35%, according to the FTC.
The school also allegedly inflated its residency match rate, claiming it can offer a match rate similar to other American medical schools. According to the complaint, telemarketers were instructed to tell customers the match rate was 85% to 95%.
However, the school’s actual average match rate has been 63%, lower than that reported by other American medical schools, the FTC said.
The for-profit medical school has two Caribbean campuses: one in Anguilla and one in St. Vincent. From 2016 to 2020, about 1,300 students enrolled each year, at a cost of $6,650 to $9,900 per trimester. Brochures stated that 60% of students were African American, Asian, Hispanic, or Latino, according to the complaint.
Kaushik Guha ran the school, which was also doing business as Human Resource Development Services, Inc. Guha and associates also marketed financing for tuition and living expenses via an affiliated company, Delta Financial Services, never disclosing that Delta was affiliated with the medical school, nor that the entities were owned by the same person, the FTC said.
The complaint also alleged that telemarketers used high-pressure sales tactics to persuade consumers to pay a $55 application fee and a $1,000 reservation fee, and to enroll. Telemarketers were allegedly instructed to try to collect the reservation fee during their outreach, even telling consumers they had 48 hours to pay the fee or risk losing their spot at the school, according to the complaint.
FTC also charged that the school failed to provide a Holder Rule notice in their credit agreements, which mandates that consumers are informed of their right to assert claims against any holder of the credit contract.
FTC’s stipulated order imposed a $1.2 million judgment to settle charges that Saint James violated agency rules. The judgment will be used for refunds and debt cancellation for students who financed their education within the past 5 years, according to the agency.
The order also requires the school and Delta to notify consumers whose debts are being cancelled. Delta will also have to ask consumer reporting agencies to delete the debt from consumer credit reports.
It also bans misrepresentation of the USMLE pass rate, residency match rate, and all unsubstantiated claims, and prohibits further violations of the Holder Rule and other regulations.
FTC noted that students who attended Saint James from 2016 to 2022 may be eligible for a refund, though there’s no need to apply or submit a complaint, since the agency said it will reach out directly to anyone who is eligible.
Saint James did not return a request for comment as of press time.
Kristina Fiore leads MedPage’s enterprise & investigative reporting team. She’s been a medical journalist for more than a decade and her work has been recognized by Barlett & Steele, AHCJ, SABEW, and others. Send story tips to firstname.lastname@example.org. Follow
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