Consumer Law

Donald Trump faces $40M suit by New York AG, who says students got lesson in bait-and-switch

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Donald Trump.
Joe Seer

Donald Trump and the former Trump University are facing a $40 million suit that claims students hoping to learn real-estate techniques paid for pricey courses that didn’t live up to promises.

New York Attorney General Eric Schneiderman announced the suit on Saturday, report the New York Times, the Associated Press and Reuters.

“More than 5,000 people across the country who paid Donald Trump $40 million to teach them his hard sell tactics got a hard lesson in bait-and-switch,” Schneiderman said in a press release. “Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn’t afford for lessons they never got.”

Ads for free workshops displayed Donald Trump’s photograph and signature, or portrayed letters by Trump himself. They promised that Trump’s handpicked experts would share his techniques; one told would-be students that they could “just copy exactly what I’ve done and get rich,” the press release says.

According to Schneiderman, Trump did not handpick any of the instructors and had little role in developing course content. Students who attended did not learn Trump’s real-estate techniques, the suit says. Instead, instructors used misrepresentations to get students to sign up for 1,495 three-day seminars, the suit alleges, where they were encouraged to sign up for mentorship programs costing $10,000 to $35,000.

Students at the three-day seminars didn’t get promised substantive instruction on how to access “hard-money lenders,” though they did get a list of lenders from a magazine, the press release says. And they didn’t get to meet Donald Trump, although some did get their photo taken with a life-size photo of Trump.

Even the name “Trump University” was misleading the suit says, since the school did not have a license to operate in the state. The name was changed in 2010 and is now called the Trump Entrepreneur Institute.

Lawyers for Trump said the allegations are false, and 98 percent of about 11,000 students who returned evaluations were “extremely satisfied.” They also claimed the attorney general’s investigation was part of an effort to extort campaign contributions from Trump.

Trump also responded in a tweet, Reuters says. “Lightweight NYS Attorney General Eric Schneiderman is trying to extort me with a civil law suit,” he wrote.

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