State says consultant failed executives
Civil lawsuit alleges it defrauded jobless
Friday, March 10, 2006
BY JOSEPH R. PERONE
Star-Ledger Staff
State regulators have accused a Middlesex County company of engaging in fraudulent practices by charging unemployed executives thousands of dollars for bogus help in finding a high-paying job.
The civil suit, announced yesterday, was filed in Middlesex County by the state Division of Consumer Affairs against Phoenix Executive Group of Iselin.
The company, which also has offices in Princeton and Parsippany, is accused of violating the Consumer Fraud Act by misrepresenting it had an extensive network of contacts through which clients could obtain high-salary jobs. The state is seeking restitution for 28 former PEG clients as well as unspecified civil penalties.
"These clients paid PEG thousands of dollars with the expectation that they would get a high- paying job," said Kimberly Ricketts, state director of Consumer Affairs. "Instead, all they got was a snow job."
Lawrence Maglin, senior vice president of operations for Phoenix, declined to comment on the specific allegations in the complaint.
"We don't try cases in a public arena," he said in an interview.
In a statement, he said consumer complaints against Phoenix represent less than 1 percent of the company's client base and that most of those cases are resolved.
"Phoenix Executive Group is extremely pleased that we have helped a great number of individuals obtain better careers," the statement said. "Our efforts have not only benefited many of our clients, but have also improved the quality of life for their families. We welcome the opportunity to respond to any questions the Department of Consumer Affairs has about our business practices and are confident that we will be able to positively address any of their concerns."
The Star-Ledger reported last June that Phoenix had the highest number of consumer complaints against it of any career consulting firm registered with the state. Consumers said they paid up to $5,000 for little more than outdated job contacts and résumés that contained spelling and grammatical mistakes.
Consumers said they were dazzled with promises of six-figure salaries at multimillion-dollar companies, but job interviews never materialized. Some former Phoenix clients in Middlesex and Morris counties tried to get their money back in small claims court but had difficulty gaining a settlement because of the restrictive contract they signed with Phoenix.
Ricketts, the consumer affairs director, called the alleged conduct "unconscionable" because many of the clients were out of work for long periods of time and were at their most vulnerable.
The civil complaint, which was filed March 7, alleges Phoenix misrepresented that its network of contacts provided clients with access to "a hidden job market" not available through other sources.
The division also alleged the company falsely guaranteed permanent employment within a specific time frame and promised to provide temporary work until a full- time job was offered.
The company promised to provide job interviews and a minimum salary as well as a hiring bonus, according to the complaint.
Companies that violate the Consumer Fraud Act can face penalties of up to $10,000 for the first offense and up to $20,000 for each additional offense.
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