The US President-elect, Donald Trump, has settled a lawsuit brought by students against Trump University for £25 million.
Trump U has faced widespread criticism for failing to deliver on promises to its students and actively encouraging aggressive marketing strategies. Staff were rewarded for hard-selling courses to even financially vulnerable adults. Ronald Schnackenberg, a former sales manager at the headquarters in New York, quit in May 2007 because he believed that “Trump University was engaging in misleading, fraudulent and dishonest conduct”.
It initially offered online classes but soon switched the focus to live seminars and events, which were purchased either on an individual basis or as part of larger package deals. However, according to an article in the New Yorker (2nd of June 2016), from when it started operating in 2005, the company was repeatedly warned by the Attorney General’s office that it was breaking the law by calling itself a university. Universities in New York State have to obtain a charter to be officially recognised.
As a sales manager, Schnackenberg received calls from students after they had taken the seminars and said that “in my experience, virtually all students who purchased a Trump University seminar were dissatisfied with the program they purchased”.
Trump had stated he would not settle “out of principle” and had previously criticised one of the judges as being automatically biased against him due to the judge’s Mexican heritage. His lawyers recently filed to postpone the trial date until after his inauguration, in order to give more time for a potential out-of-court settlement.
Having now backtracked on his earlier assertion to see the case to trial, Trump announced on Twitter; “I settled the Trump University lawsuit for a small fraction of the potential award because as President I have to focus on our country.” He later added; “The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!”
Although the case did not make it to trial in the end, the shadow of the lawsuit will no doubt remain over Trump as his inauguration approaches.