Clarification on the Use of Guarantees in Marketing

NMLS has received several requests to clarify item 1A of the Course Provider Standards-of-Conduct which states all advertising and marketing must be truthful and be void of any misleading statements, promises, or guarantees (e.g., a course may not be promoted in such a way as to guarantee that an individual will pass a test after completing the course).  Specifically, questions have arisen pertaining to certain advertisements from NMLS Approved Course Providers that have recently appeared in which providers are offering to reimburse students their test fees if they fail either the national or state components of the MLO SAFE test after they have taken the provider’s course.

Providers are prohibited from guaranteeing that students will pass the MLO SAFE test as a result of taking their courses.  Guarantees of this sort are unenforceable.  Simply put:  it would be nearly impossible for a provider to guarantee an individual will pass the test.  However, providers may make “money-back guarantees.” In these cases, providers  guarantee that they will refund students the cost of the course, or the test fee, or both if students do not pass the test and have prepared for the test by taking a provider’s course.  Providers that wish to make these types of guarantees must adhere to their normal refund policies, must make the guarantee offers uniformly available to all students, and must communicate the guarantee and refund language in clear and simple language.

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