Newly unsealed testimony from a lawsuit against the now-defunct Trump University appears to indicate that employees at the real estate training program were more focused on upselling students on additional seminars than they were on providing a bona fide education.
“Trump University would lure consumers into the initial free course based upon the name and reputation of Donald Trump, and then once they were there, Trump University personnel would try to up-sell consumers to the next course using high-pressure sales tactics,” reads the testimony [PDF] of a former events manager who worked for the school in 2007. “Far from providing a ‘complete real estate education,’ as advertised, Trump University personnel only provided enough information to get students to sign up for the next seminar or program.”
According to this former manager, the school’s speakers, instructors, and mentors — who were described in advertising materials as being personally selected by Mr. Trump — lacked any experience in the real estate market.
“Many of them did not even own houses, and had no experience buying or selling real estate,” she recalled in her testimony from Sept. 2012, pointing to one instructor whose previous experience was in jewelry sales.
Regarding the marketing claims of Mr. Trump handpicking the school’s instructors, the events manager alleges that this was far from the truth.
“I believe that in many instances Donald Trump had neither met the instructors or mentors, nor did he know who they were,” she explained, contending that the school hired most of its mentors and speakers through a third party based in New Hampshire.
Additionally, she says these outside hires appeared to have more training in high-pressure sales tactics than in real estate, claiming that two of them had to be fired “because they kept trying to get Trump University students to invest in their own personal businesses.”
She claims that instructors were trained to tell students in one $1,500 seminar to call their credit card companies and raise their credit limits two, three, or four times so that they would be able to invest in real estate.
“They would tell students to max out their credit card because they would make their money back,” says the former events manager. “I recall that some consumers had showed up who were homeless and could not afford the seminars, yet I overheard Trump University representatives telling them, “it’s ok; just max out your credit card.” I also witnessed representatives instructing consumers to charge the course to multiple credit cards if they lacked a high enough limit on one credit card to pay for the seminar. In fact, I recall representatives telling consumers to open up as many credit cards as they could to increase their credit score.”
In more damning testimony [PDF], a sales manager who worked for Trump University in 2006 and 2007 claims he left his job because he believed that Trump University was “engaging in misleading, fraudulent and dishonest conduct.”
He says he was reprimanded after he tried to advise a couple to not take the school’s $35,000 Elite program because they would have had to taken out a home equity loan and used the husband’s disability income to pay for the seminar.
Eventually, according to the former sales manager, another sales rep convinced the couple to take the pricey class. “I was disgusted by this conduct and decided to resign.”
“Based on my personal experience and employment, I believe that Trump University was a fraudulent scheme, and that it preyed on the elderly and uneducated to separate them from their money,” he concluded.
Another unsealed declaration [PDF] from a former Trump University sales executive echoes many of the other sentiments, labeling the instructors as “a joke” and claiming that sales staff were told to focus on getting people to sign up for increasingly expensive courses.
Additionally, he claims that Trump University “used testimonials that were false, misleading and fabricated. Testimonials were not expected results and were not realistic.”
While the former employees all claim that Mr. Trump had little to no involvement in the day-to-day running of Trump University, testimony from the Trump U. president Michael Sexton gives a better idea of the involvement of the program’s namesake.
Sexton, in testimony from Aug. 2012, recalled that he and his partners were initially going to license the Trump name for their program, but that Mr. Trump ultimately chose to take an equity stake in the University because “he thought it was a compelling concept” and didn’t want to be an “arm’s length” licensor.
According to the testimony, Mr. Trump was involved in approving marketing and ad materials because he “is protective of his brand and very protective of his image and how he’s portrayed… he wanted to see how his brand and image were portrayed in Trump University marketing materials. And he had very good and substantive input as well.”
This particular lawsuit against Trump University is expected to go to trial in November. Mr. Trump has repeatedly denied allegations of wrongdoing and has said he believes he will ultimately prevail.
by Chris Morran via Consumerist
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