The Federal Trade Commission issued an order on Friday against the Saint James School of Medicine, also doing business as Human Resource Development Services, Inc., and its operator Kaushik Guha. This order against the Caribbean school was regarding deceptive marketing, violations of the Holder Rule, which preserves rights for injured consumers, and the Credit Practices Rule, which protects consumers in credit contracts.
According to the agency, Saint James School of Medicine and its agents issued two different fraudulent claims to induce new students to attend. They claimed that attendees had 96.77% first time test taker USMLE Step 1 pass rate, when the actual rate of passage was closer to 35%. They also claimed that the match rate for Saint James School of Medicine students with US residency programs was 84%, when since 2018 the match rate has been 63%. Both of these factors made transitioning to a US based practice very difficult for students.
Saint James School of Medicine also marketed financing for tuition and living expenses, however the contracts given for this financing failed to include the required notices under the Holder rule that they had a right to assert claims against the holder of the credit contract. The contracts also excluded the required notices under the Credit Practices Rule for cosigners regarding their potential liabilities under the contract.
The stipulated order imposts a judgment of more than $1.2 million for tuition refund and debt cancellation, required notifications to credit reporting agencies regarding the cancellation of the debt, ban future misrepresentation of the pass and match rates, and requires that there be no further violations of the Holder and Credit Practices Rules in the future.
