ACCC Secures Win Against Private College

The private training college has agreed to repay at least $50 million it received under the Federal Government loan scheme, and forgo up to another $110 million.

A statement from the ACCC said Careers Australia had admitted that through the conduct of some of its agents in door-to-door marketing across Australia, it made false or misleading representations and engaged in unconscionable conduct, in breach of the Australian Consumer Law.

The conduct included

• Misrepresenting that the courses were free,

• Misrepresenting that the courses would allow consumers to find employment or would increase their chances of finding employment, and

• Offering inducements such as iPads and laptops and claiming they were provided for free if the consumer signed up to the courses.

“This conduct affected some of the most vulnerable and disadvantaged groups of consumers in Australia,” ACCC chairman Rod Sims said.

“For example, it is unacceptable that Career Australia allowed 80 consumers from a remote Aboriginal community in Yarrabah, Queensland, to be enrolled into courses and incur debts when they were offered inducements to sign up but not alerted to the debts they would incur.

“It is also unacceptable that significant Commonwealth money went to fund courses that were often not undertaken.”

Pursuant to the undertaking, Careers Australia has undertaken to automatically cancel the enrolments of students who have not completed a unit of study, and to repay the Commonwealth any amounts received as a result of those enrolments.

Between August 1, 2013 and March 31, 2015, Careers Australia received and processed applications from about 40,000 students for enrolments into its VET FEE-HELP courses.

Of these students, 20,242 were enrolled and incurred a debt to the Commonwealth.

Careers Australia received approximately $190 million worth of payments from the Commonwealth in relation to these students.

Only 3332 students enrolled during that period graduated.

Pursuant to the undertaking, Careers Australia will also invite other students who may have been misled to approach them should they want to have their enrolment and debt cancelled.

Careers Australia has undertaken to:

• Inform students on its website and at its 15 campuses across Australia about the potential availability of having their enrolment and debt cancelled

• Implement an Australian Consumer Law Compliance Program, including training for staff and regular reviews, and

• Not engage in the conduct of concern in the future.

The ACCC said Careers Australia has since cancelled at least 12,130 of the student enrolments and either repaid or partially repaid to the Commonwealth amounts totalling at least $44.3 million, including cancellations made in the course of the ACCC investigation.

If the enrolments had not been reversed, Careers Australia could have received payments upwards of $300 million from the Commonwealth.

“The ACCC acknowledges that Careers Australia co-operated with our investigation and worked to address the problems, which is why we have accepted the undertaking rather than taking court action.,” Mr Sims said.

“The ACCC will continue to investigate the education sector and take appropriate action to ensure consumers are not misled about the nature of courses and the debts they will incur.”

The ACCC is believed to be investigating four other colleges which offered VET FEE-HELP courses.

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