Consumer Law Library

Guides For Private Vocational And Home Study Schools

16 CFR Part 254 · Guides · in the Code of Federal Regulations 1973-1995 (23 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1995 CFR · Earliest edition: 1973 CFR

Text (1995 edition, OCR)

Federal Trade Commission

that fact. A crushed feather product
should not contain residue in excess of
5 percent of the weight of the crushed
feathers contained therein. [Guide 7)

§253.8 Damaged feathers.

An industry product which contains
damaged feathers in an amount in ex-
cess of 2 percent of the total weight of
the filling material should be labeled
with a clear and conspicuous disclosure
that it contains damaged feathers.
[Guide 8]

§253.9 Secondhand filling material.

(a) An industry product which con-
tains any filling material which has
previously been used should not be of-
fered for sale unless a clear and con-
spicuous disclosure of that fact is made
on the label thereof and in all advertis-
ing and invoices relating to such prod-
uct.

(b) In making the disclosure referred
to in paragraph (a) of this section the
term ‘“‘secondhand”’ may be used. How-
ever, such terms as “reworked,” ‘“‘re-
processed,”’ or terms of similar import
should not be used unless they are ac-
companied by a clear and conspicuous
statement that such material is not
new or has previously been used.
[Guide 9]

§ 253.10 Cleanliness of filling material.

(a) An industry product which con-
tains filling materials which have not
been cleaned so as to meet the stand-
ard set forth in paragraph (b) of this
section should not be offered for sale or
sold.

(b) A test such as that reflected in
Federal Standard 148a, dated December
10, 1964, entitled ‘‘Classification, Iden-
tification, and Testing of Feather Fill-
ing Material,’? should be used to deter-
mine whether feathers and down have
been properly cleaned. Feather and
down material having an oxygen num-
ber exceeding 20 grams of oxygen per
100,000 grams of sample should be pre-
sumed not to have been properly
cleaned. [Guide 10]

§253.11 Disclosure as to size.

(a) Sleeping bags. The sizes of sleeping
pags should be disclosed by labeling
and such sizes should be expressed in
terms of the finished length and width

157-061 O—95——4

87

§ 253.11

measurements of the bag in inches
qualified by the words ‘‘Finished Size’’.
If any representation of the ‘“‘Cut Size”’
or the dimension of the materials used
in the construction of sleeping bags,
are made in labeling, advertising,
marking, or otherwise, the provisions
of the Commission’s Trade Regulation
Rule on the ‘“‘Advertising and Labeling
as to Size of Sleeping Bags’’ should be
followed (see Part 400 of this chapter).

(b) Comforters, etc. The sizes of com-
forters and other similar industry
products should be disclosed by label-
ing and such sizes should be expressed
in terms of the finished length and
width measurements in inches exclu-
sive of any fringe ornamentation.

(c) Pillows, cushions, etc. The sizes of
pillows, cushions, and other similar in-
dustry products, when disclosed by la-
beling, should be expressed in terms of
finished measurements in inches quali-
fied by the words ‘‘Finished Size.’’ This
statement may be followed in paren-
theses by a notation of product meas-
urement in inches prior to finishing,
such parenthetical expression to in-
clude the phrase ‘‘Cut Size.”’ Thus, an
example of proper size marking when a
pillow has a finished size of 21” x 27”
and a cut size of 22” x 28”, and disclo-
sure is made of the cut size, would be:

Finished Size 21” x 27” (Cut Size 22” x 28”).
[Guide 11]

PART 254—GUIDES FOR PRIVATE
VOCATIONAL AND HOME STUDY
SCHOOLS

Sec.

254.1 Definitions.

254.2 Deceptive trade or business names.

254.8 Misrepresentation of extent or nature
of accreditation or approval.

254.4 Misrepresentation of facilities, serv-
ices, qualifications of instructors, and
status.

254.5 Misrepresentation of enrollment quali-
fications or limitations.

254.6 Deceptive use of diplomas, degrees, or
certificates.

254.7 Deceptive sales practices.

254.8 Deceptive pricing and misuse of the
word “‘free.’”’

254.9 Deceptive or unfair collection and
credit practices.

254.10 Affirmative disclosure prior to enroll-
ment.


§ 254.1

AUTHORITY: 38 Stat. 717, as amended; 15
U.S.C. 41-58.

SOURCE: 37 FR 9665, May 16, 1972, unless
otherwise noted.

§264.1 Definitions.

(a) Industry member. Any person, firm,
corporation, or organization engaged in
the operation of a privately owned
school which offers resident or cor-
respondence courses or training or in-
struction purporting to prepare or
qualify individuals for employment in
any occupation or trade or in work re-
quiring mechanical, technical, artistic,
business, or clerical skills or which is
for the purpose of enabling a person to
improve his appearance, social apti-
tude, personality, or other attributes is
considered to be an industry member.
However, the term ‘‘industry member”
shall not include resident primary or
secondary schools or institutions of
higher education which offer at least a
2-year program of accredited college
level studies for resident students
which is generally acceptable for credit
toward a bachelor’s degree.

(b) Accredited. For the purpose of this
part the term ‘‘accredited’’ means that
a course or school to which the term is
applied has been evaluated and found
to meet established criteria by an ac-
crediting agency or association recog-
nized by the U.S. Commissioner of Edu-
cation of the U.S. Department of
Health, Education, and Welfare, as reli-
able authority as to the quality of the
training offered.

(c) Approved. For the purpose of this
part, the term ‘‘approved’’ means that
a school or course has been recognized
by a State or Federal agency as meet-
ing educational standards or other re-
lated qualifications as prescribed by
that agency for the school or course to
which the term is applied. It is not and
should not be used interchangeably
with ‘‘accredited,” and the term ‘“ap-
proved’’ is not justified by the mere
grant of a corporate charter to operate
or license to do business as a school
and should not be used unless the rep-
resented “approval” has in fact been
affirmatively required or authorized by
State or Federal law. [Guide 1}

88

16 CFR Ch. | (1-1-95 Edition)

§254.2 Deceptive trade or business
names,

(a) An industry member should not
use any trade or business name, label,
insignia, or designation which has the
capacity and tendency or effect of mis-
leading or deceiving prospective stu-
dents, or student with respect to the
nature of the school, its accreditation,
programs of instruction or methods of
teaching, or any other material fact.

(b) An industry member should not
falsely represent directly or indirectly
by the use of a trade or business name
or in any other manner that:

(1) It is a part of or connected with a
branch, bureau, or agency of the U.S.
Government, or of any State, or civil
service commission;

(2) It is an employment agency or
that it is an employment agent or au-
thorized training facility for another
industry or member of such industry,
or otherwise deceptively conceal the
fact that it is a school.

(c) If an industry member conducts
its instruction wholly by correspond-
ence or home study, a clear and con-
spicuous disclosure should be made in
immediate conjunction with its trade
or business name that it is a cor-
respondence or home study school. An
industry member which offers both
resident and correspondence or home
study instruction should clearly and
conspicuously identify in all advertise-
ments and promotional materials, ex-
cept in those pertaining solely to its
resident program, the programs or
courses to be offered in whole or in
part by correspondence or home study.
[Guide 2)

$254.3 Misrepresentation of extent or
nature of accreditation or approval.

(a) An industry member should not
misrepresent directly or indirectly the
extent or nature of any approval its
school may have received from a State
agency or the extent or nature of its
accreditation by a nationally recog-
nized accrediting agency, or associa-
tion. Dlustratively, an industry mem-
ber should not:

(1) Unqualifiedly represent that its
school is accredited unless all of its
programs of instruction have in fact
been accredited by an accrediting agen-
cy recognized by the U.S. Commis-


Federal Trade Commission

sioner of Education of the U.S. Depart-
ment of Health, Education, and Wel-
fare. If an accredited school offers
courses or programs of instruction
which have not been accredited, all ad-
vertisements or promotional materials
pertaining to such courses or programs
should contain a clear and conspicuous
disclosure that they are not accredited
if any reference is made in the adver-
tisements or promotional materials to
the accreditation of the school.

(2) Represent that its school or a
course is approved, unless the nature,
extent, and purpose of that approval
are disclosed.

(3) Represent that students success-
fully completing a course or program
of instruction may transfer credit
therefor to an accredited institution of
higher education unless such is the
fact.

(b) An industry member should not
represent that a course of instruction
has been approved by a particular in-
dustry, or that successful completion
thereof qualifies the student for admis-
sion to a labor union or similar organi-
zation, or for the receipt of a State or
Federal license to perform certain
functions, unless such is the fact.

(c) An industry member should not
represent that its courses are rec-
ommended by vocational counselors,
high schools, colleges, educational or-
ganizations, employment agencies, or
members or officials of a particular in-
dustry, or that it has been the subject
of unsolicited testimonials or endorse-
ments from former students or anyone
else unless such is the fact. Testimo-
nials or endorsements which do not ac-
curately reflect current practices of
the school, or current conditions or
employment opportunities in the in-
dustry or occupation to which the
training pertains, should not be used.
[Guide 3]

$254.4 Misrepresentation of facilities,
services, qualifications of instruc-
tors, and status.

(a) An industry member should not
misrepresent directly or indirectly in
its advertising, promotional materials,
or in any manner the size, location, fa-
cilities, or equipment of its school or
the number or educational qualifica-
tions of its faculty and other person-

§ 254.4

nel. Nlustratively, an industry member
should not:

(1) Use or refer to fictional organiza-
tion divisions or position titles or
make any representation which has the
tendency or capacity to mislead or de-
ceive students or prospective students,
as to the size or importance of the
school, its divisions, faculty, personnel,
or officials, or in any other material
respect.

(2) Misrepresent directly or indi-
rectly the size, importance, location,
facilities, or equipment of the school
through use of photographs, illustra-
tions, or any other depictions in cata-
logs, advertisements, or other pro-
motional materials. For example, pho-
-tographs or illustrations which purport
to show school equipment should not
be used if the school does not use such
equipment in the conduct of its
courses.

(3) Represent that the school owns,
operates, or supervises a dormitory,
eating, or other living accommodations
unless such is the fact.

(4) Falsely or deceptively represent
the location or locations at which its
courses will be conducted.

(5) Misrepresent the nature, or effi-
cacy, of its courses, training devices,
methods or equipment or the number,
qualifications, training, or experience
of its faculty or personnel, whether by
means of endorsements or otherwise.

(6) Falsely represent that it will pro-
vide or arrange for part or full-time
employment while the student is un-
dergoing instruction; or misrepresent
in any manner, directly or by implica-
tion, the wvailability of such employ-
ment or any other form of financial as-
sistance.

(7) Deceptively represent the nature
of any relationship which the school or
any of its officers, employees, or in-
structors may have with the U.S. Gov-
ernment or any of its agencies or any
agency of a State or local government,
or that by virtue of such a relationship
or any prior relationship its students
will receive preferred consideration in
obtaining employment with such a gov-
ernment or any of its agencies.

(8) Represent directly or indirectly
that certain individuals or classes of
individuals are bona fide working
members of its faculty, or are members

89


§ 254.5

of its advisory board, or have played an
active part in the preparation of its in-
struction materials, unless such is the,
fact, or misrepresent in any manner,
directly or by implication, the extent
or nature of the association of any per-
son with the school or the courses of-
fered.

(9) Misrepresent the nature and ex-
tent of any personal instruction, guid-
ance, assistance, or other attention it
will provide for its students either dur-
ing a course or after completion of a
course.

(b) An industry member should not
represent directly or indirectly that it
is a nonprofit organization unless such
is the fact.

(c) An industry member should not
falsely represent that it is affiliated
with or otherwise connected with a
public or private religious or chari-
table organization.

(ad) An industry member should not
falsely or deceptively represent that a
course has been recently revised, or
that it has a revision system or serv-
ice, or misrepresent in any manner, its
facilities, procedures, or ability to
keep a course current. [Guide 4]

§254.5 Misrepresentation of enroll-
ment qualifications or limitations.

(a) An industry member should not
misrepresent the nature or extent of
any prerequisites it has established for
enrollment in a course or program of
instruction. For example, it should
not:

(1) Represent that a course is avail-
able only to those having a high school
diploma or other specific educational
qualifications, unless the sale of such a
course is limited to persons possessing
generally acceptable evidence of such a
diploma or educational qualifications.

(2) Represent that only those who
make an acceptable grade or complete
successfully a certain test or examina-
tion will be admitted, if in fact enroll-
ments are not thus limited.

(3) Falsely represent that it will ac-
cept for enrollment only a limited
number of persons or a limited number
of persons from a certain geographical
area.

(4) Falsely represent that applica-
tions for enrollment will be considered
for only a limited period of time, or

90

16 CFR Ch. | (1-1-95 Edition)

that they must be submitted by a cer-
tain date.

(b) An industry member should not
falsely represent that the lack of a
high school education or prior training
or experience is not a handicap or im-
pediment to successful completion of a
course.

(c) An industry member should en-
deavor to establish the qualifications
which an applicant should have to as-
similate successfully the subject. mat-
ter of the course. Applicants should be
informed of these prerequisites, and
those who are not so qualified should
not be enrolled. [Guide 5]

§ 254.6 Deceptive use of diplomas, de-
grees, or certificates.

(a) An industry member should not
issue a degree, diploma, certificate of
completion, or any document of simi-
lar import, which misrepresents di-
rectly or indirectly the subject matter,
substance or content of the course of
study or any other material fact con-
cerning the course for which it was
awarded or the accomplishments of the
student to whom its was awarded.

(b) An industry member should not
offer or confer an academic, profes-
sional, or occupational degree, if the
award of such degree has not been au-
thorized by the appropriate State edu-
cational agency or approved by a na-
tionally recognized accrediting agency,
unless it clearly and conspicuously dis-
closes in al) advertising and pro-
motional materials which contain a
reference to such degree that its award
has not been authorized or approved by
such an agency.

(c) An industry member should not
offer or confer a high school diploma
unless the program of instruction to
which it pertains is substantially
equivalent to that offered by a resident
secondary school, and unless the stu-
dent is informed by means of a clear
and conspicuous disclosure in writing
prior to his enrollment, that the indus-
try member cannot guarantee or other-
wise control the recognition which will
be accorded the diploma by institu-
tions of higher education, other schools
or by prospective employers, and that
the degree to which it is recognized is
a matter solely within the discretion of
those agencies. [Guide 6]


Federal Trade Commission

$254.7 Deceptive sales practices.

(a) In obtaining leads to prospective
students, an industry member should
not use advertisements or promotional
material which is classified, designated
or captioned, ‘“‘Men wanted to train for
***”, “Felp Wanted”, “Employment”,
“Business Opportunities” or by words
or terms of similar import, so as to
represent directly or by implication
that employment is being offered.

(b) An industry member should not
deceptively designate or refer to its
sales representatives as “registrars’’,
“counselors’’, “advisors”, or by words
of similar import or misrepresent in
any other manner, the titles, qualifica-
tions, training, experience or status of
its salesmen, agents, employees, or
other representatives.

(c) The advertising or promotional
materials of an industry member which
are used to provide leads to prospective
students should include the full name
and address of the school (a local ad-
dress is permissible in the case of a
multilocational school) and disclose
the fact that it is a school if such is
not apparent from its name. In addi-
tion, a person who responds to such an
advertisement or promotional material
should not be visited by a salesman un-
less the advertisement or material con-
tains a clear and conspicuous disclo-
sure that a salesman may call or unless
consent to such a visit is first obtained
by mail or telephone.

(d) In obtaining leads to prospective
students, an industry member should
not represent that it is conducting a
talent hunt, contest, or similar test,
unless such is the fact and such rep-
resentation is accompanied by a clear
and conspicuous disclosure of the in-
dustry member’s name and address and
the fact that it is a school if such is
not apparent from its name. An indus-
try member which conducts a talent
hunt, contest, or similar test among
prospective students should keep accu-
rate records concerning the results
thereof. [Guide 7]

§254.8 Deceptive pricing and misuse
of the word “free.”

(a) An industry member should not
represent directly or indirectly in ad-
vertising or otherwise that a course or
courses may be taken for a specified

91

§ 254.8

price, or at a saving, or at a reduced
price, when such is not the fact: or oth-
erwise deceive students or prospective
students with respect to the cost of a
course or any equipment, books, or
supplies associated therewith or fur-
nish any means or instrumentality by
which others engaged in obtaining en-
rollments may make such representa-
tions. Illustratively, an industry mem-
ber should not represent:

(1) That veterans or other stated
classes of persons may be enrolled at a
reduced or special rate unless such is
the fact;

(2) That a specific amount is its usual
and customary price for a course unless
such amount is the price at which the
course has been usually and customar-
ily sold in the recent regular course of
business;

(3) That any saving is afforded in the
price of a course from the member’s
regular price unless the price at which
the course is offered constitutes a re-
duction from the price at which the
course has been usually and customar-
ily sold in the recent regular course of
business;

(4) That books, training materials, or
training aids are furnished at reduced
rates,

(i) Unless the prices therefor have
been reduced from the prices at which
they were usually and customarily sold
by the member in the recent and regu-
lar course of business; or

(ii) Unless the prices therefor have
been reduced from the prices at which
they were usually and customarily sold
at retail by principal outlets in the
trade area.

(b) An industry member should not
misrepresent the total cost of the
course to a prospective student or
falsely represent that it offers scholar-
ships which pay for all or part of the
course.

NoTrE: The Commission’s Guides Against
Deceptive Pricing (Part 233 of this chapter)
afford further guidance in this area.

(c) An industry member which rep-
resents that any course material,
training device, or service is free
should comply with the provisions of
the Commission’s Guide Concerning
Use of the Word “Free” and Similar
Representations (Part 251 of this chap-
ter). [Guide 8]


§ 254.9

§254.9 Deceptive or unfair collection
and credit practices.

(a) An industry member should not
use any deceptive representations or
deceptive means to collect or attempt
to collect tuition or other charges from
its students. For example, an industry
member should not represent that a de-
linguent account has been or will be re-
ferred to an independent collection
agency or to an attorney unless such is
the fact.

(b) An industry member should not
seek to enforce or obtain a judgment or
otherwise attempt to collect on any
contract or other instrument between
itself and a student, or transfer or as-
sign such contract or other instrument
to a third party for the purpose of col-
lection or of enforcing or obtaining a
judgment on said contract or instru-
ment, if the member or its employees
or representatives misrepresented the

nature or the terms of said contract or |

instrument at the time or prior to the
time the contract or instrument was
signed.

Nore: The Commission’s Guides Against
Debt Collection Deception (Part 237 of this
chapter) afford further guidance in this area.

[Guide 9]

$254.10 Affirmative disclosure prior to
enrollment. : ;

Before obtaining the signature of a
prospective student or of his parent or
guardian on an enrollment contract or
contract of sale, an industry member
should furnish in writing to that per-
son or persons the following informa-
tion:

(a) The member’s policy and regula-
tions relative to make-up work, delay
or delinquency in meeting course re-
quirements, and standards required of
the student for achieving satisfactory
progress, including class attendance if
applicable.

(b) If the member recommends, sug-
gests, or requires that the student have
or secure any additional texts, equip-
ment, or materials other than usual
student supplies such as paper and pen-
cils, or utilize any supplementary serv-
ices offered by the member, and the
cost thereof is not included in the con-
tract price of the course, an itemized

16 CFR Ch. I (1-1-95 Edition)

list of such items and services showing
the price thereof.

(c) In the case of courses to be taught
in residence, a description of the
school’s physical facilities, and equip-
ment to be used in teaching the class,
and the usual class size.

(d) If the member represents that it
offers a placement service to its grad-
uates or will otherwise secure or assist
them to find employment, a detailed
and explicit description of the extent
and nature of this service or assist-
ance.

(e) Any other material facts concern-
ing the school and the program of in-
struction or course which are reason-
ably likely to affect the decision of the
student to enroll therein. [Guide 10]

PART 255—GUIDES CONCERNING
USE OF ENDORSEMENTS AND
TESTIMONIALS IN ADVERTISING

Sec.
255.0
255.1
255.2
255.3

Definitions.

General considerations.

Consumer endorsements.

Expert endorsements.

255.4 Endorsements by organizations.

255.5 Disclosure of material connections.
AUTHORITY: 38 Stat. 717, as amended; 15

U.S.C. 41-58.

§255.0 Definitions.

(a) The Commission intends to treat
endorsements and testimonials identi-
cally in the context of its enforcement
of the Federal Trade Commission Act
and for purposes of this part. The term
endorsements is therefore generally used
hereinafter to cover both terms and
situations.

(b) For purposes of this part, an en-
dorsement means any advertising mes-
sage (including verbal statements,
demonstrations, or depictions of the
name, signature, likeness or other
identifying personal characteristics of
an individual or the name or seal of an
organization) which message consum-
ers are likely to believe reflects the
opinions, beliefs, findings, or experi-
ence of a party other than the sponsor-
ing advertiser. The party whose opin-
ions, beliefs, findings, or experience the
message appears to reflect will be
called the endorser and may be an indi-
vidual, group or institution.

92,