Lana Oconnell
Trump University, incorporated in 2004, was not an accredited university or college. It conducted seminars and used misleading marketing practices and aggressive sales tactics to sell them to its customers. In 2011, the company became the subject of an inquiry by the New York Attorney General's office for illegal business practices, which resulted in a lawsuit filed in August 2013. The court found that Trump University had defrauded its students, and in January 2016, a $25 million settlement proposal was approved, with $21 million going to the students who were defrauded. While the exact number of students defrauded is unclear, the high refund request rate from unsatisfied consumers (32% for the three-day seminar and 16% for the Gold Elite package) and the fact that Trump University stopped enrolling students in July 2010 indicate that a significant number of students were affected by the fraudulent practices.
| Characteristics | Values |
|---|---|
| Number of students defrauded by Trump University | Unknown, but a $25 million settlement proposal includes $21 million in funds for defrauded students |
| Nature of fraud | Misleading marketing practices, aggressive sales tactics, deceptive practices, and misrepresentation in advertisements |
| Evidence of Trump's involvement | Trump was involved in key decisions, and there is evidence he engaged in "patterns of racketeering activity" |
| Trump's response | Trump filed a complaint alleging that the investigation was accompanied by a campaign donation shakedown, but this was dismissed |
| Outcome | The case was ongoing as of 2024, with a San Diego federal court due to meet to decide on a settlement agreement |
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What You'll Learn
Trump University was not an accredited university
Trump University, also known as the Trump Wealth Institute and Trump Entrepreneur Initiative LLC, was an American company founded in 2004 by Donald Trump and his associates Michael Sexton and Jonathan Spitalny. The company was incorporated as a New York limited liability company, with Trump owning 93% of it. On May 23, 2005, Trump University formally launched its education program.
Despite its name, Trump University was not an accredited university or college. It did not confer college credit, grant degrees, or grade its students. Instead, it conducted three- and five-day seminars, often called "retreats," and used high-pressure tactics to sell them to customers. These seminars were not cheap, with prices ranging from $1,500 for a three-day course to $10,000 to $35,000 for silver, gold, or elite mentored courses. While it was not a licensed educational institution, Trump University employed many of the same tactics as predatory colleges, such as preying on vulnerable populations and implying that it offered a fast track to financial security.
The organization faced multiple lawsuits and student complaints, with allegations that it defrauded its students through misleading marketing practices and aggressive sales tactics. In 2011, the company became the subject of an inquiry by the New York Attorney General's office for illegal business practices, and a lawsuit was filed in August 2013. Trump University was also the subject of two class-action lawsuits in federal court.
In 2016, Trump settled all three lawsuits for a total of $25 million after being elected president. While the exact number of defrauded students is unclear, records indicate that 7,611 tickets were sold to customers attending courses.
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Misleading marketing and aggressive sales tactics
Trump University, incorporated in 2004, was not an accredited university or college. It conducted three- and five-day seminars, often called "retreats", and employed high-pressure tactics to sell them to customers. The company did not confer college credit, grant degrees, or grade its students.
In 2011, the New York Attorney General's office launched an inquiry into Trump University for illegal business practices, resulting in a lawsuit filed in August 2013. The organisation was also the subject of two class-action lawsuits in federal court, which alleged that it had defrauded its students through misleading marketing practices and aggressive sales tactics.
The released documents included "playbooks" instructing employees to use a hard-sell approach. Former employees testified that Trump University had defrauded or lied to its students. The playbooks also advised sales staff on how to identify students with the most liquid assets.
Trump University employed misleading marketing tactics, such as claiming that its staff had been hand-picked by Donald Trump, when in fact, Trump had never met the instructors. Trump himself claimed in advertisements that he could turn anyone into a successful real estate investor, including them. The company also used deceptive practices, such as offering free workshops that were merely selling grounds for the three-day seminars, providing little usable content.
The aggressive sales tactics included pushing students to sign up for expensive courses, with prices ranging from $1,495 to $35,000 for the "Gold Elite" program. About 6,000 students purchased the $1,500 3-day course, and 1,000 bought the more expensive silver, gold, or elite mentored courses. The sales tactics preyed on vulnerable populations, implying that the school offered a fast track to financial security and creating the impression that recruiters were friendly advisors.
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Students pressured to give high ratings
Although the exact number of students defrauded by Trump University is unclear, there were three lawsuits filed against the school by former students accusing Trump of deception and fraud. Trump University was incorporated in 2004 and launched its education program in 2005. Despite its name, it was not an accredited university or college and did not confer degrees or grades. The company was the subject of a 2011 inquiry by the New York Attorney General's office for illegal business practices, which resulted in a lawsuit in 2013. The lawsuits centred on allegations that Trump University defrauded its students through misleading marketing and aggressive sales tactics.
Trump University students have reported that they were pressured to give high ratings and positive reviews for the program. Robert Guillo claimed that he gave a glowing endorsement because a teacher begged him to, saying that otherwise, "Mr Trump might not invite me back to teach again". Jeffrey Tufenkian's high ratings were reportedly due to his assigned mentor refusing to leave the room until he gave excellent ratings. John Brown testified that employees of Trump University called him multiple times, pushing him to raise his poor review, and that he "finally gave in".
In addition to pressuring students for positive reviews, Trump University also used high-pressure tactics to sell its seminars and programs. The company charged high prices, with teachers explaining to students that this was to encourage them to "assume personal responsibility for doing the work".
The released documents in the case included "playbooks" with instructions for employees to use a hard-sell approach. Despite Trump's lawyers insisting that "folks were not coerced", the evidence suggests that Trump University employed manipulative tactics to obtain positive reviews and sell its programs.
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Trump's involvement in key decisions
Trump University was incorporated in 2004 by Donald Trump, who owned 93% of the company, along with Michael Sexton and Jonathan Spitalny. The company was not an accredited university or college, but it offered courses in real estate, asset management, entrepreneurship, and wealth creation.
Trump was heavily involved in key decisions at Trump University. At the opening presentation in 2005, Trump said:
> "If I had a choice of making lots of money or imparting lots of knowledge, I think I'd be as happy to impart knowledge as to make money."
Trump University charged high prices for its seminars and programs, which were justified by one teacher as being necessary for students to "assume personal responsibility for doing the work." The company's original business plan focused on online education, but it quickly expanded to include live, in-person instruction.
In 2011, Trump University became the subject of an inquiry by the New York Attorney General's office for illegal business practices, which resulted in a lawsuit filed in August 2013. The inquiry found that the company had engaged in false, misleading, and deceptive practices. Trump University was also the subject of two class actions in federal court, with plaintiffs alleging that the company had defrauded its students through misleading marketing practices and aggressive sales tactics.
Despite repeatedly insisting that he would not settle, Trump agreed to pay $25 million to settle the two class actions and the New York suit in November 2016, after being elected president. The settlement included $21 million for the participants in the class actions, $3 million for New Yorkers not covered by the class actions, and a penalty of up to $1 million assessed by the state of New York for operating an unlicensed university. Trump did not admit any wrongdoing as part of the settlement.
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Students felt uncomfortable and pressured
Trump University, incorporated in 2004 and launched in 2005, was not an accredited university or college. It conducted three- and five-day seminars, often called "retreats", and used high-pressure tactics to sell them to its customers. The company charged high prices for these seminars, which did not count for college credit or lead to degrees.
Trump University became the subject of multiple lawsuits and inquiries, including by the New York Attorney General's office, for its illegal and deceptive business practices. These practices included misleading marketing and aggressive sales tactics that defrauded its students.
Students of Trump University felt uncomfortable and pressured by the intense sales tactics used by instructors. Despite giving high ratings on course evaluation surveys, many students complained about the cost, content, and tactics employed by the university. They felt pressured into making decisions they did not want to make and were even pressured to give high ratings on course surveys, regardless of their true opinions.
In 2016, a San Diego federal court approved a $25 million settlement proposal, with $21 million going to students defrauded by Trump University and $4 million to the New York Attorney General's case. This brought the long-standing legal case on Trump University to a close.
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Frequently asked questions
It is unclear exactly how many students were defrauded by Trump University, but a $25 million settlement agreement included $21 million in funds for the students who were defrauded.
Trump University was accused of defrauding its students by using misleading marketing practices and engaging in aggressive sales tactics.
Trump University was incorporated in 2004 as a New York limited liability company. It was not an accredited university or college, but it conducted three- and five-day seminars, often called "retreats".
In January 2016, a San Diego federal court granted preliminary approval to a $25 million settlement proposal. The lawsuits were centred on allegations that Trump University defrauded its students.
