Following a joint investigation by the Australian Competition and Consumer Commission and NSW Fair Trading into the conduct of private colleges, the ACCC and the Commonwealth (on behalf of the Department of Education and Training) have instituted proceedings in the Federal Court against Unique International College Pty Ltd (Unique).
Unique sells VET FEE-HELP Diploma courses, costing from $22,000 to $25,000 per course, using face-to-face marketing, including door-to-door sales. In the 2014-15 financial year, Unique enrolled over 3,600 students in their Diploma courses and was paid approximately $57 million by the Commonwealth in respect of those enrolments.
The proceedings allege that Unique made false or misleading representations and engaged in misleading or deceptive and unconscionable conduct, in breach of the Australian Consumer Law (ACL), when selling VET FEE-HELP funded courses between July 2014 and September 2015 in New South Wales.
It is alleged that Unique offered prospective students a free laptop, and in doing so, represented that the course(s) were free or were free if the consumer did not earn approximately more than $50,000 per annum, when in fact consumers incurred a VET FEE-HELP debt payable to the Commonwealth Government if they earnt more than $54,126 in the 2014-2015 income year.
It is also alleged that Unique’s conduct, including its marketing and enrolment system and its dealings with some consumers was, in all the circumstances, unconscionable, in contravention of the ACL.
“The conduct of concern allegedly targeted some of the most vulnerable groups in the Australian community, including consumers from remote areas and from low socio-economic backgrounds. Only 2.4 per cent of the consumers who signed up to and commenced Unique’s courses between 1 July 2014 and 30 December 2014 completed their course,” ACCC Chairman Rod Sims said.
“It is alleged that the sales process used by Unique included free incentives, unfair tactics and the failure to provide clear and accurate information about the price of the courses and the nature of the VET FEE-HELP loan,” NSW Fair Trading Commissioner Rod Stowe said.
“It is important that colleges are upfront with prospective students and clearly explain the price of the courses they are offering. Consumers need to be able to fully understand what they are agreeing to before making a decision to sign up to a course. The VET FEE-HELP loan incurred by students is a lifetime debt,” Mr Stowe said.
Mr Sims said: “We are particularly concerned that unscrupulous door-to-door marketing practices previously used in the energy sector are now appearing in the education sector. The joint investigation illustrates how seriously both agencies view these allegations. The ACCC and NSW Fair Trading are continuing to investigate the conduct of private colleges in the education sector”.
The ACCC is seeking declarations, injunctions, redress for affected consumers (by cancelling VET FEE-HELP debts), pecuniary penalties, corrective notices and orders requiring the implementation of a consumer law compliance program. The ACCC and the Commonwealth are seeking orders for the repayment of course fees paid by the Commonwealth to Unique in respect of any VET FEE-HELP loans which are cancelled by court order, as well as costs.
The matter has been filed in the Federal Court’s Sydney Registry. The first Directions Hearing is set for 24 November 2015 at 9.30am before Justice Perram.