Rich Dad Education seminars travel to cities around the country with the enticing promise of teaching people how to become rich. But some of its dissatisfied customers say the seminars have done the opposite — and left them in debt.
Sarah Newsome recently graduated from the University of Missouri-Columbia. On top of paying back her student loans, she also now has about $7,250 in credit card debt after signing up for an advanced Rich Dad real estate investment course.
She waited a week to ask for a refund, missing the company’s three-day refund window. Still, she thinks she should get a full refund because she never attended a class. On top of that, when she tried to use the course software that was supposed to identify potential investment opportunities, she said, she didn’t find any local properties in the database.
She had paid $500 to attend an initial three-day Rich Dad seminar last summer. It seemed legitimate enough, she said. After all, it was associated with the best-selling book “Rich Dad, Poor Dad” by Robert Kiyosaki. And on the first day, she did learn some things about real estate.
“The second day, though, they had us do certain things that when we look back now look fishy,” she said. “Slowly it turned into this gigantic sales pitch.”
During a break, they asked students to call their credit card companies to increase their limits to $10,000 as a supposed lesson in negotiating. They wouldn’t learn until later that $10,000 also happened to be the cost of the cheapest Rich Dad advanced classes that the company tried to sell them on during days two and three, she said.
“Looking back now, I feel really silly,” Newsome said of her decision to sign up for the course. “You think of yourself as an intelligent person. How could I fall for something like that?
“But it was a really powerful experience where you let your guard down.”
A 75-year-old retired teacher in Springfield also got caught up in the excitement and put down $35,000 for a Rich Dad real estate class in 2008. She later sued the company and hopes to recoup her money.
The classes are “unfairly overpriced, of minimal value, difficult and expensive to attend, poorly presented and of little substance,” the suit says.
James May, senior legal officer for Tigrent, the Cape Coral. Fla.-based company that is licensed to run the Rich Dad seminars, said the company “religiously” honored its three-day refund policy. Beyond that, he said, students can get a refund if they are dissatisfied after attending the classes. But the student has to attend all of those classes to get the refund.
“We try to do right by the student,” he said. “We try to look at each on a case-by-case basis.”
But the company hasn’t had a stellar track record. The Better Business Bureau gives it an “F” rating for not responding to all the complaints against it. Over the last three years, there have been 83 complaints about the seminars — 15 of which Tigrent has not responded to and 4 of which remain unresolved.
“Some of the complaints have indicated high-pressure sales,” said Karen Nalven, president of the BBB of West Florida. “And we’ve seen that some people weren’t happy with the furthering education classes that they were promised.”
She recommends that consumers who sign up for these kind of seminars take the time to understand the terms and conditions of the contracts beforehand.
“That’s a good way to safeguard your money instead of getting that refund afterward and feeling like you have to buy something under pressure,” she said.
May of Tigrent blamed the poor BBB rating on the company’s predecessor — Whitney Information Network. That company reached a settlement with the Florida attorney general back in 2008 in which it agreed to refund more than $1 million to dissatisfied customers who complained that it engaged in deceptive advertising and misleading business practices.
Ever since the company reformulated under the name of Tigrent in the fall of 2009, it has been more diligent in responding to customer complaints, May said.
“The new management has a new way of doing things,” he said. “We have a new focus on customer satisfaction.”