Cosmetology school, with Cedar Rapids and Iowa City locations, settles fraud lawsuit

A Fort Dodge-based cosmetology school with locations in Cedar Rapids and Iowa City has agreed to resolve a consumer fraud lawsuit with a settlement through a consent judgment.

Iowa Attorney General Tom Miller's office on Thursday said La' James International College has agreed to change its practices, submit to third party oversight, forgive $2.1 million of student debt and pay the state $550,000.

La' James principals Cynthia and Travis Becher each will pay an additional $25,000. The payments will primarily go toward partial refunds to current and former students.

La' James and the Bechers admit no wrongdoing in the settlement.

The settlement resolves a lawsuit filed in Polk County District Court in 2014 alleging La' James engaged in deceptive, omissive, and unfair practices in marketing, enrollment, and instruction. The agreement affects future and current students, as well as former students who owe debts to La' James.

La' James is required to substantially improve transparency for prospective students, including a one-page disclosure form that will provide:

Clearly disclosed costs and fees associated with enrollment and tuition;

An expected timeline for completing the program, and the percentage of students who successfully completed it within the past three years;

A list of items and materials the school expects students to purchase. La' James will allow them to buy required items elsewhere, a change from past practices.

A list of current instructors and their qualifications to prospective students who request it.

La' James also must provide prospective and current students with a handbook that clearly discloses detailed program requirements, policies, and expectations. The handbook must include the total number of hours the school requires for students to complete the program, attendance and leave of absence policies, and how the school assigns customers at its salons.

La' James no longer will require students to recruit customers to receive credit or pay the school for clients. Students will be able to fulfill 50 percent of their skills requirements through non-paying customers.

The school will not require students to perform janitorial or sanitation services beyond Iowa Board of Cosmetology Arts & Sciences or Iowa Board of Massage Therapy minimum requirements.

'This settlement addresses certain past practices by La' James' that we allege were simply unfair to many of its students,” Miller said in a news release. 'This agreement will help level the playing field for current and future students, and it puts in place an outside monitor (former U.S. Attorney Nicholas Klinefeldt) to help ensure future fairness and compliance.”