AG Nessel issues warning after iDrive fails to refund students
IONIA, Mich. (WILX) - A Notice of Intended Action (NIA) was issued to iDrive Academy after failing to refund students following the surrender of its driver education provider certification.
Several driver complaints were filed with the Michigan Department of State (MDOS), describing iDrive’s alleged deceptive business practices, misleading marketing tactics and failure to make refunds for driving classes that were paid for but never provided.
iDrive is also accused of offering driver instruction to adult students whom it was not certified to instruct and misrepresenting or falsifying course completion records. As a result, adult students face additional challenges from the company’s misrepresentation of its certification.
“Having properly trained drivers on Michigan roads is vital for the safety of everyone who lives in this state,” said Michigan Attorney General Dana Nessel. “And consumers have a right to get the services they pay for. The allegations against iDrive suggest the company may have failed on both fronts. My consumer protection team is committed to ensuring that Michigan consumers have guardrails against bad faith business practices.”
These actions implicate several sections of the Michigan Consumer Protection Act (MCPA), including:
- Causing a probability of confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.
- Representing that goods or services have sponsorship, approval, or characteristics that they do not have or that a person has sponsorship, approval, status, affiliation, or connection that they do not have.
- Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer and which truth could not reasonably be known by the consumer.
- Failing, in a consumer transaction that is rescinded, canceled, or otherwise terminated by the terms of an agreement, advertisement, representation, or provision of law, to promptly restore to the person or persons entitled to it a deposit, down payment, or other payment[.]
- Making a representation of fact or statement of fact material to the transaction such that a person reasonably believes the represented or suggested state of affairs to be other than it is.
- Failing to reveal facts material to the transaction in light of representations of fact made positively.
In its April 2023 Provider Closeout Agreement, iDrive admitted to 21 or more severe violations of the Michigan Driver Education Provider and Instructor Act. In the same Agreement, iDrive surrendered its provider certification for under five years and agreed to “make all consumers whole and provide a full refund to students enrolled in courses they were unable to complete.”
Nessel alleges iDrive has reneged on its obligation to financially restore students impacted by its closure in the Closeout Agreement. It is believed iDrive has not yet refunded many of its students, and the total number of impacted students cannot be confirmed due to iDrive’s fragmented business records.
The Department’s intended action outlined in the notice is to file suit seeking all available remedies to protect consumers’ rights, including injunctive relief, imposition of civil fines, and appropriate compensation, should iDrive not assure voluntary compliance.
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