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The Federal Court has found that an Australian private college engaged in a system of unconscionable conduct and made false or misleading representations to prospective students in relation to the online diploma courses it offered.
Productivity Partners Pty Ltd, trading as Captain Cook College, implemented a system of unconscionable conduct from 7 September 2015, when it removed consumer safeguards from its enrolment and withdrawal processes for online courses under the former VET FEE-HELP loan program.
VET FEE-HELP was a Government scheme created to assist eligible students to pay their tuition fees for higher-level vocational education and training courses undertaken at approved providers.
During a period of about three months following these changes, Captain Cook College enrolled over 7,000 consumers in online courses in subjects such as business, project management and human resource management.
As a result, the college claimed over $50-million for about 6,000 students under the Commonwealth program.
“Captain Cook College enrolled vulnerable and disadvantaged consumers in courses they were unlikely to ever complete, or receive any vocational benefit from, despite incurring a large VET FEE-HELP debt,” said Rod Sims, Chair of the Australian Competition and Consumer Commission (ACCC).
“Over 90 percent of the affected consumers did not complete any part of their online course, and about 86 percent of them never even logged into their course.”
The Court found that “…the college well knew that its dramatic increase in revenue and turnaround in profits was substantially built on [VET FEE-HELP] revenue in respect of students who may have been the victims of [course advisors’] misconduct, were unsuitable for enrolment, should not have been enrolled and who would gain no benefit whatsoever from their enrolment, yet who incurred very substantial debts to the Commonwealth as a result of their enrolment.”
In addition, Captain Cook College was found to have breached the Australian Consumer Law in its dealings with five individual consumers by engaging in unconscionable conduct, making false or misleading representations and failing to comply with the requirements for unsolicited consumer agreements.
The Court also found that the college’s parent company, Site Group International Limited (Site Group) and its former chief operating officer, Blake Wills, were knowingly concerned in Captain Cook College’s system of unconscionable conduct.
The Court will decide penalties and other orders in relation to Captain Cook College, Site Group and Wills at a later date.