December 3rd, 2001

Students' Names Can End Up in Some Questionable Hands

By Daniel Golden
Wall Street Journal

Students surveyed by the National Research Center for College and University Admissions can find themselves targeted not just by colleges, but all manner of consumer marketers—including some that have run into trouble with the law.

National Research annually sells more than a million names and related personal information to American Student List, which resells them to a wide array of marketers. The vast majority of these companies are legitimate, says Donald Damore, American Student List’s president.

But he acknowledges that his company has sold student names drawn from the National Research survey to customers tainted by wrongdoing. For example, in the 1990s, American Student List supplied names to Christopher Nwaigwe of Maryland, who was convicted on federal mail-fraud charges in 1999. The conviction in U.S.  District Court in Baltimore followed a Federal Trade Commission investigation that found that Mr. Nwaigwe had offered phony scholarships to tens of thousands of students, bilking them out of a total of $520,000. He received a three-year prison sentence.

Mr. Damore says American Student List also sold student names from the National Research survey to College Resource Management Inc., a Grand Prarie, Texas, company that paid $40,000 in May to settle civil FTC allegations that it had misrepresented its ability to obtain college financial aid for students.

American Student List has cut off all dealings with Mr. Nwaigwe and College Resource Management, Mr. Damore says. He adds that his company cooperated with the investigation of Mr. Nwaigwe.

Maria Cristina Plasencia’s experience illustrates how providing a name to National Research may lead to a student’s being fed into the growing youth-marketing machine.

Ms. Plasencia, now 17 years old, took the National Research survey in 1999, as a sophomore at Woodland High School in Woodland, Calif. National Research then sold her name, along with those of all other respondents, to American Student List. (It is possible that American Student List received her name from another source, as well.)

American Student List, in turn, sold her name to College Financial Aid Services Inc., an Albany, N.Y., consulting company, according to John Braat, chief operating officer of College Financial Aid. The consulting company invited Ms. Placensia and her mother, Romelia Madueno, to a free seminar at a Sacramento hotel in March 2000. There, a College Financial Aid representative told them they needed help to avoid making costly mistakes in applying for federal financial aid, the mother and daughter say.

“They made it seem if you get one thing wrong, you can’t get financial aid,” Ms. Plasencia says. Her mother agreed to pay the firm $800. “I don’t want Maria to end up driving a truck,” says Ms. Madueno, herself a truck driver and mother of four.

College Financial Aid collected its $800, but all the teenager has received from it is a booklet of flash cards that are supposed to help prepare her for the SAT college-admissions test, mother and daughter say.

Mr. Braat says his company hasn’t provided more advice to the teenager because Ms. Plasencia failed to fill out questionnaires that came with the flash cards and didn’t tell the company when she wanted to initiate the financial-aid process.

Ms. Plasencia and her mother say the 17-year-old didn’t fill out the forms because the paperwork took months to arrive and seemed similar to federal-aid applications available from her high-school counseling office. Ms. Plasencia says that when she graduates in the spring, she now intends to join the Air Force, which she hopes will help pay for college.

The Better Business Bureau of upstate New York gives College Financial Aid an “unsatisfactory” rating because of frequent consumer complaints.  The FTC investigated the company this year but hasn’t taken any action, Mr.  Braat says. The FTC declines to comment.

Mr. Braat says “there are a lot of bad companies” in the financial-aid field, but his isn’t one of them. “We love nothing more than to see people getting educated.”

American Student List’s Mr. Damore says he is unaware of any complaints about College Financial Aid or of the company’s negative Better Business Bureau rating.  He asks, “Is American Student List supposed to be a law-enforcement division?” Even after being informed of complaints about College Financial Aid, Mr. Damore says he plans to continue to sell it names.

National Research’s president, Donald Munce, says he assumes that American Student List sells to legitimate customers.

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