Google: Phoenix Executive Group Lawsuit
This from the Wall Street Journal
Buyer Beware: A State Watchdog
Discusses Career-Consulting Suit
By Perri Capell
In recent years, state law-enforcement agencies have cracked down on numerous career-services firms that typically charge hefty up-front fees but don't deliver on their promises.
In the latest case, the New Jersey Attorney General and Division of Consumer Affairs have filed a civil suit against the Phoenix Executive Group (PEG), a career-consulting organization with offices in Iselin, Parsippany and Princeton, N.J. The suit alleges that the company charged clients thousands of dollars in advance but then didn't provide agreed-upon services or uphold its promises, which included guarantees to find clients permanent jobs paying certain minimum salaries and hiring bonuses.
In an emailed statement, Lawrence B. Maglin, a senior vice president of the firm, said complainants in the lawsuit represent about 1% of the approximately 2,500 clients the company has served in the past 5 1/2 years. "We welcome the opportunity to respond to any questions the Department of Consumer Affairs has about our business practices and are confident we will be able to positively address any of their concerns," he said in the statement.
CareerJournal spoke with N.J. Attorney General Zulima V. Farber about the case:
What are the main complaints against this company?
These are detailed in the official complaint [requires Adobe Acrobat]. They include allegedly requiring consumers to pay thousands of dollars up front before any services are provided and not offering a refund policy if the contracted services are not provided, as required under the New Jersey Consumer Fraud Act.
The company also allegedly said it has an exclusive list or network of companies and executives who would give clients access to the "hidden" job market, when this wasn't the case.
We also allege that the Phoenix Executive Group promised or guaranteed to provide clients with interviews and permanent jobs with minimum salaries and hiring bonuses within a specified time.
This company is registered as a career-counseling firm and therefore cannot provide placement services. We allege that they went way beyond what was permitted by law and presented themselves as a well-connected employment firm, instead of what they are registered as, which is a career-counseling firm.
How do they get their clients?
They came through ads in newspapers, job fairs and cold calls to people who posted resumes online at certain job-search sites.
What fees are clients charged?
The average fee was in the $2,000 to $3,000 range. These often were paid up front on a credit card.
PEG said that they could guarantee clients would find jobs because of their good connections, and people were paying up front because of that promise. However, the customers told us that if they knew they were only getting help with a resume, they would not have paid for that. They were willing to pay these fees because they thought they could recoup them by finding employment.
How many complaints did you receive?
We received 28 complaints, and they are all named in the suit. We have had complaints against a few other firms in the same industry, but not anywhere near this number.
Why do job hunters sign up for services that promise access to a 'hidden' job market?
It's because the unemployed people they targeted -- specifically high-salaried people -- are desperate. They aren't used to being unemployed, and if they find themselves out of work for a long period of time, they will do anything to find a job. These people may be particularly vulnerable to these misrepresentations.
Where is the case now?
The discovery process will start now. We will request that they provide certain documents and information, and I am sure they will want the copies of the consumer complaints we received.
How long will it take for this case to come to trial?
That's hard to tell. The discovery phase could take at least a year, but it could be resolved faster than that if the case is settled.
Will PEG keep operating in a business-as-usual fashion in the meantime?
That's not easily answered. We are seeking an injunction, and if we have evidence that they are continuing to operate in the same manner as in the complaint, we could move in court to get a preliminary injunction and ask the court to keep it in place until the trial.
-- Ms. Capell is a senior correspondent for CareerJournal.com.
New York, New York
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