Attorney general sues Waltham driving school accused of bilking students out of thousands

The attorney general’s office has filed a lawsuit against a Waltham driving school for collecting thousands of dollars in fees from students despite knowing it was about to close, officials said.

The complaint was filed today in Suffolk Superior Court, the attorney general’s office said in a statement.

In the lawsuit, Attorney General Martha Coakley said that Frederick Lovely, owner of Cam’s Automobile School, planned to close the operation as early as October 2010 because of financial problems, but continued to sign up hundreds of new students and accept their tuition payments until March 2011.

“We allege that this driving school misled its prospective students and the RMV in order to turn a profit despite the fact they allegedly knew they were in dire financial straits and planned to close,’’ Coakley said. “As a result, hundreds of young students lost money, and were forced to pay even more to complete their driver’s education.’’

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Officials said that about 537 students paid the school a total of about $175,000, and received no services. In order to boost enrollment in the final weeks before it closed, the auto school allegedly offered discounts of $175 off the $575 tuition fee if students paid with a cash or check.

In addition to tuition, Cam’s Automobile School collected fees from its students on behalf of the school districts in which it was operating, such as Lexington, Natick, Needham, Wayland, and Wellesley, but failed to forward the fees to the schools, officials said.

“The licensing process and completing a driver’s education program is a major milestone in the lives of many young people in Massachusetts,’’ said Rachel Kaprielian, registrar of motor vehicles for the state. “The added financial stressor detailed in this instance is grossly unfair to teens and their families.’’

The lawsuit seeks to prohibit the auto school and Lovely from providing driving instruction in the state, and seeks restitution for the affected students.

A call to Lovely was not immediately returned.

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