Muftic: Trump University
August 12, 2016
Scrutiny of the Trump University class action law suits should not be buried in the flap over Donald Trump's racist charges against the judge hearing the class action suit who authorized releasing some of the court records. It may tell a lot about Trump's ethics and his sincere caring about those he promises to help. The suit will not go to trial until after the November election, but releasing some of the court documents, as the judge did, could shed some light on why consumers sued and what they are charging.
My antenna is still raised when I smell a con game. Many years ago I was the director of a white collar and consumer fraud unit for local district attorneys .Later, I was the public trustee of Denver supervising foreclosures and even later as an executive with non profit Consumer Credit Counselling Services in Denver.
I smelled a con game when I heard about this suit. The scheme of holding seminars, charging big bucks, and marketing to those who were in need of additional income, not necessarily those who had the wherewith all to make use of the information in the seminars, has been around for a long time. Trump University took this to another level, turning it into a major marketing opportunity to make a dime. High pressure sales tactics appeared to have been used to target lower middle income participants to max out credit cards and to buy extensive educational material, whether they were financially able to afford what the Trump U school taught or even to afford to participate.
Is this a crime? Not all unethical business practices are criminal, but if the participants feel they have been sold with deceptive trade or advertising practices, it could be criminal or civil. Promising blue sky high returns while knowing participants could never or were unlikely to realize their investments is an example of this. Criminal prosecution may get the perpetrators in jail or fined, but the victims would probably not get their money back. Civil suits are the method needed to get restitution. It is particularly sad when victims are lower income and could not sue individually, to get refunds. because of the cost of attorney fees, as many appear to be in the Trump case. In the Trump University case, those who felt victimized have been represented in a class action suit which allows attorneys on their own dime to represent all of those who feel victimized, gambling they win the suit and get compensated for their time and efforts, as well as getting money back for all in the "class".
At the risk of embarrassing a good friend of mine, here is a story worth repeating. Over ten years ago and freshly retired, she asked me about "investing" her money in a course to learn how to get rich on real estate investing.
There have been and are traveling conductors of seminars held in rented hotel facilities that sound similar to the kinds of courses taught at Trump University. Those travelers charge high dollars for the "secrets' that are mostly calling on their students to borrow money to pay for their courses that then urge them to buy property, go into debt, and flip it later for a buck. Of course, that only works if a market is on the upswing or if investors have cash or the credit and means to borrow, but she was not told that. She was a single woman with few savings, living on Social Security and a small employer pension. She maxed out her credit cards and showed me the material the seminar distributed. It was mostly xeroxed newspaper clippings. I warned her. Later she told me that when she was attending the seminar, law enforcement officials raided the class room and carted away the instructors in hand cuffs. I do not know if she ever took such courses again, but her savings and cash flow went to the seminar and she never was able to invest or flip. She is now in her late 70's and in her "retirement years", she is still working to supplement her income. The only ones who usually get rich are the seminar conductors law enforcement or civil and class action plaintiffs do not catch.
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