BRICK – A school for hairstyling with a campus in Brick has agreed to pay nearly $640,000 to resolve the State’s lawsuit for allegedly defrauding students and performing poor business practices.
Additionally, the school agreed to surrender its licenses to operate in New Jersey, Acting Attorney General Matthew J. Platkin said.
The Capri Institute of Hair Design had roughly 250 students between Brick, Paramus, Clifton, and Kenilworth, officials said.
The school shut down operations in December 2021 with less than 48 hours prior notice to its students. As a result, the Division of Consumer Affairs became aware of Capri’s shutdown after receiving a flood of complaints from students affected by the abrupt closure.
A Division investigation found that the school didn’t respond to students after the closure and refused to provide students with official transcripts or refunds, making it virtually impossible to transfer to another school.
Capri briefly reopened three campuses months after the initial shutdown, however they allegedly failed to open the attached clinics as required, leaving students without the ability to obtain the necessary clinical hours to become licensed by with the State Board of Cosmetology and Hairstyling (“the Board”).
In addition, the school allegedly engaged in substandard business practices that financially harmed students. They also failed to provide students with Board-mandated books and supplies that were included in the cost of tuition.
“New Jersey is committed to ensuring the pathway to success is open to all, including access to the training and education needed to achieve career goals,” Attorney General Platkin said. “Our Division of Consumer Affairs is supporting that mission by ensuring for-profit schools deliver on their promise of a quality education that provides students a meaningful opportunity for success.”
“Capri’s students paid thousands of dollars in tuition, or incurred thousands of dollars in student loan debt, believing they were investing in a brighter financial future,” Cari Fais, Acting Director of the Division of Consumer Affairs, said. “Instead, Capri defrauded them. The settlements announced today hold the school and its operators accountable for their actions, provide restitution to affected students, and send a clear message that this kind of unlawful conduct will not be tolerated.”
The state filed a lawsuit on June 3, 2022, and alleged Capri and its associated entities violated the Consumer Fraud Act and advertising regulations.
The State also filed a Verified Complaint before the Board the same day alleging Capri violated Board curriculum requirements by failing to provide a clinical education component at the three reopened Capri school locations and violated Board regulations by failing to comply with a Board investigative inquiry and by cancelling the bonds it was required to post with the State to operate.
On November 2, the lawsuit was resolved and Capri will pay the Division nearly $640,000, up to $500,000 of which is to be allocated to consumer restitution.
The Division plans to provide cash refunds for students who Capri unenrolled or who withdrew from Capri on or after the school’s December 2021 closure. Students who were able to graduate will receive partial refunds for the disruption to their education.
The Final Consent Judgment also includes injunctive relief, including directing Capri:
• not to sell any student debt owed to it to any third party;
• not to seek to collect any monies from its former students; and
• not to engage in any debt collection activity or engage in negative credit reporting, for any student who has ever been enrolled at Capri.
Should Capri own or operate any cosmetology-related programs in the future, the Final Consent Judgment, among other things, requires Capri to:
• provide students all educational supplies and equipment by no later than the third day of class;
• refrain from engaging in unfair or deceptive business practices and comply with all applicable State and Federal rules and laws, including New Jersey’s Consumer Fraud Act and Advertising Regulations;
• provide refunds in a timely manner to students who have overpaid on their accounts; and
• provide official transcripts in a timely manner to students upon request.
The Verified Complaint before the Board was resolved in a Final Consent Order filed on November 6, that reprimands Capri for violating the Board’s rules and regulations.
Capri was ordered to immediately surrender its four Board-issued licenses that allowed them to operate programs at the four New Jersey campuses, and requires Capri to pay $25,600 in costs and fees to the Board.
The Final Consent Order also stipulates that if Capri or any related entity seek a license to operate a school of cosmetology and hairstyling in the future, they must be prepared to provide the Board with a specific and detailed business plan that includes details specifying how they intend to avoid the issues that led to the investigation into its business practices.
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