A company that tried to sell students and parents a $25 card it said was "required" for college has agreed to pay back the nearly $150,000 it made in 35 states.
The National College Registration Board (NCRB) in Princeton, N.J., also agreed to close down three months after it mailed letters to 1.8 million high school seniors and college students promoting the "Campus Card."
The New Jersey Consumer Affairs' cyberfraud unit began investigating the company after noticing an offer on the Internet. New Jersey joined with 34 other states after complaints began to come in from around the country.
"The Campus Card is the student identification card issued to all registered college students," read the official-looking letter that went to students. "It is required for many services and purchasing privileges at whichever college or university your student chooses to attend."
An accompanying brochure shows a sample card with "University of Michigan" written on it. The company's Internet Web site featured the names of hundreds of other schools, including Rutgers University in New Brunswick, N.J., until the site was shut down in April amid complaints from college representatives. The card has no connection to the schools listed in its marketing materials, company founder Matthew Levenson acknowledged. A call to the firm went unanswered last week.
NCRB agreed to repay 2,681 students or their parents $67,025 it collected, says Mark Herr, director of the New Jersey Division of Consumer Affairs.
About 300 people from New Jersey will receive refunds. The company also turned over $78,550 in uncashed checks written by about 3,100 people. And the US Postal Service is returning between 5,000 and 7,000 pieces of mail it has held at the Princeton. N.J., Post Office since May, spokesman Tony Esposito says. The letters will be returned with a stamp saying the company is "out of business," he says.
Mr. Levenson, Michael Vaughn, and Chris Cononico are all graduates of the University of Pennsylvania's Wharton School of Business, where they offered the QuakerCard, a debit card offering discounts from local merchants. The school had warned Levenson and his company, University Student Services, not to imply the QuakerCard was connected to the school.