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"If we as parents want our kids to do well on these college entrance tests, and we can help another child build money toward a scholarship, of course we're going to do it," said Lizee, of Shorewood, Minn.
But according to a lawsuit filed Wednesday by Minnesota Attorney General Lori Swanson, the Dream Scholars Foundation has misled Lizee and many other parents.
Swanson said the money doesn't appear to be going toward scholarships, and even if it did, she said the group isn't registered to solicit charitable contributions in Minnesota.
Swanson accused the group of lying to parents by saying that their children had requested the materials to prepare for the ACT and SAT, and that the organization was affiliated with their child's school.
"We'd like to help people get their money back. These people made these purchases based upon things that turned out not to be true," Swanson said.
Officials at Dream Scholars Foundation did not immediately return a message seeking comment.
Lizee received a call from Dream Scholars in August 2009. She agreed to buy the software, but when she showed it to her daughter, her daughter said she hadn't requested it and didn't want it.
Last fall, after a week of trying, she finally got through to the company and requested a refund. She hasn't received it yet.
"This is a scam, and I was taken," she said.
The lawsuit also alleges that Dream Scholars enrolls parents who purchase the materials into an online college prep database without adequate notice or permission. A $55 monthly fee is charged to the parents' credit cards unless they cancel.
The lawsuit, filed in Hennepin County District Court, accuses Dream Scholars of consumer and charities fraud, and of soliciting unauthorized charitable contributions.
Swanson questioned Dream Scholars Foundation's nonprofit status, saying it is not considered a tax-exempt charity by the Internal Revenue Service.
"We'd like to get refunds (and) get it back into people's hands, so they can make their own informed choices about what they want to do with their money," she said.