Federal Judge Grants Permanent Injunction Request to Stop XAP from Misleading Students on Its Mentor College Admission Sites

PORTLAND, Ore., April 21 /PRNewswire/ -- Citing the continuing use of deceptive language on so-called "Mentor" websites operated by XAP Corporation of Los Angeles on behalf of FFEL lenders affiliated with Kentucky Higher Education Assistance Authority and the Georgia Student Finance Commission, federal judge Anna Brown agreed to order a clean-up of language presented to students. The judge stated that "On this record, the Court concludes Defendant's [XAP's] revisions to its online application process continue to be inadequate because they fail to convey in clear and unequivocal language that when they check the 'Yes' box, students are giving 'express consent and direction' to Defendant to provide their personal information to third parties who have paid a fee to Defendant in part for their right to receive that information."

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The judge stated that "Although Defendant asserts it no longer sells student information, KHEAA contracted to pay Defendant $378,216 in 2006 for the 'purpose of maintaining and operating the [website].' In 2004 GSFC contracted to pay Defendant an annual fee of $217,718.45 with rates to be increased each year thereafter to operate and to maintain its website. Accordingly, those universities and colleges within the aegis of KHEAA and GSFC continue to reap the benefit of Defendant's online application process free of charge whereas they would have to pay Plaintiff a fee to obtain similar services."

Judge Brown continued: "The Court agrees with Plaintiff that it continues to suffer irreparable harm by remaining at a competitive disadvantage to Defendant as to online application systems used by Defendant that do not adequately disclose to students that they are authorizing Defendant to provide their personal information to third parties such as KHEAA and GSFC if the students answer 'Yes' to the opt-in question on Defendant's websites that are sponsored by KHEAA and GSFC."

Citing the public interest, Judge Brown noted that "The Court concludes it is in the public interest for students to be made aware unequivocally of the consequences of checking the 'Yes' box on Defendant's opt-in question by conspicuous language at the point where the opt-in question appears."

The full text of the Judge's Opinion and Order is available at http://corp.collegenet.com/news/pr_04_21_08.pdf

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2008-04-21 22:00:24 0341242 PRNEWSWIRE