FRANKFORT, Ky. (Legal Newsline) - Kentucky Attorney General Jack Conway filed a lawsuit on Thursday against the owners and operators fo Daymar College for allegedly violating the state's Consumer Protection Act.
The for-profit Daymar Learning Inc., Daymar Learning of Paducah Inc., Draughons Junior College Inc., Daymar Colleges Group LLC, Daymar Holdings Inc., as well as Mark Gabis, the president of the companies, allegedly violated the Consumer Protection Act by engaging in unfair, false, misleading and deceptive trade practices.
In 2008, Conway's office revived information that Daymar College was preventing the purchase of textbooks and supplies by students from other cheaper sources.
Conway's office then issued subpoenas and civil investigative demands to Daymar College in 2009 and 2010, concluding that Daymar College was engaged in a sophisticated practice of deceiving and misleading students about their textbooks and financial aid, forcing students to purchase books and supplies from the college at substantially higher prices than other vendors. The complaint alleges that the defendants' actions also amount to an unlawful restraint of trade.
The attorney general alleges that Daymar College provided false and misleading information to students about the transferability of credits earned at the college, informing students that their credits would transfer. Written information provided to students about the transferability of credits allegedly omits that credits are not likely to transfer to other schools.
Additionally, some of the programs offered at Daymar College allegedly do not meet the standards of its institutional accrediting organization. Daymar College is also alleged to have enrolled students who failed to meet the school's criteria for admission or general standards for admission to career colleges, increasing the likelihood that a student would withdraw from the program, be unable to pay the debt incurred by attending the college or be unable to obtain a job in their career field.
Daymar Learning Inc., with the exception of one other school, has the highest default rate of an Kentucky-based school, according to information from the U.S. Department of Education.
Daymar College campuses or learning sites in Kentucky are located in Owensboro, Louisville, Albany, Bellevue, Madisonville, Scottsville, Paducah, Bowling Green, Russellville and Clinton. There also is an online Daymar College. An additional Daymar College campus was previously located in Newport, Kentucky.
In addition to Daymar College, Conway has now started looking into six other for-profit colleges in December. Conway's concerns about the for-profit college industry follows his review of Daymar College and the for-profit Decker College and American Justice School of Law. Conway is also leading a national bipartisan effort, including 19 other states, that is examining potential abuses within the industry.
"As attorney general, it is my job to ensure that businesses operating in Kentucky are following our Consumer Protection laws," Conway said. "It is also my duty to ensure that consumers are not being taken advantage of as a result of unfair or false business practices."