In the largest settlement of its kind in history, Bell & Howell electronic and accounting correspondence schools have agreed to pay $1.4 million to former students who failed to get promised jobs in their field of study.
In the landmark agreement obtained by the Federal Trade Commission, the agency will have sole authority to determine which students of the now defunct schools will be eligible to receive funds and how much each will receive.
The FTC complaint, issued in May 1977, alleged that Bell & Howell made "false and misleading" claims in its advertisements and sales presentations about job opportunities for graduates, as well as earning potential, qualifications needed for enrollment and the nature of the home-study courses.
Because of the consent agreement negotiated by the commission's Chicago office, the school will make refunds to students who did not get jobs after taking the Bell & Howell courses, as well as students who dropped out after requesting -- but not receiving -- tutorial help or those who dropped out for lack of skills.
Earlier, in an unprecedented action, Bell & Howell agreed to deposit $1.2 million in an escrow account for potential consumer redress. Interest is expected to swell that account to $1.425 million by the time payments must be made.
The agreement does not constitute an admission by Bell & Howell that it violated any laws, and the company had disputed the allegations in the complaint before an administrative law judge of the FCT in the summer of 1978.