Date: 12-14-2007
New York Attorney General Andrew M. Cuomo has announced a new Code of Conduct to prevent false and misleading loan marketing practices from being communicated to students. According to the Code, lenders would not be allowed to use false insignia or other devices giving them the appearance of being part of the federal government. Loan marketing companies would have to sign a uniform disclosure statement, allowing students to compare terms of loans offered through direct marketing. Lenders would also be required to inform students that they should opt for federal loans before turning to private loans. The Code prohibits lenders from using marketing gimmicks like gift cards, contests, or sweepstakes to lure students. It also prevents marketers from buying the rights to a college or university name, team name, colors, logo, or mascot for marketing purposes. This Code of Conduct is a result of the Attorney General's investigation of direct-to-student marketing of college loans. The investigation revealed that various loan companies offered students used fake checks and rebates, provided $100 gift cards to recruit other students, and advertised sweepstakes worth thousands of dollars. "When lenders use deceptive techniques to advertise their loans, they are playing a dangerous game with a student's future," said Cuomo.
