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 (for Department of Education and Training) has filed proceedings in the Federal Court against Australian Institute of Professional Education Pty Ltd (AIPE).

AIPE is a provider of VET FEE-HELP Diploma courses, costing from $12,160 to $19,600 per course. It marketed and sold these courses using face-to-face marketing, including door-to-door sales, as well as telemarketing. Between 1 January 2013 and 1 December 2015, it is alleged that AIPE enrolled approximately 15,426 students into VET FEE-HELP Diploma courses and was paid in excess of $210.9 million by the Commonwealth for those enrolments.

The ACCC and Commonwealth allege that AIPE made false or misleading representations and engaged in unconscionable conduct, in breach of the Australian Consumer Law (ACL), when marketing and selling VET FEE-HELP funded courses between 1 May 2013 and 1 December 2015 in areas in at least New South Wales, Queensland and Western Australia.

It is alleged that AIPE represented to prospective students that they would receive a free laptop or tablet and that the course(s) were free or were free if the consumer did not earn approximately more than $50,000 per annum. In fact, the laptop or tablet students received were on loan, and students enrolled in the courses incurred a VET FEE-HELP debt payable to the Commonwealth Government. Repayment of this debt would commence if they earned more than a specified amount in a financial year ($53,345 in the 2014-2015 income year).

It is also alleged that AIPE’s pattern of behaviour for enrolling students into its courses and its dealings with vulnerable consumers was, in all the circumstances, unconscionable.

ACCC Chairman Rod Sims said: “We allege AIPE marketed its courses to some of the most vulnerable and disadvantaged groups in the Australian community, including consumers from low socio-economic backgrounds and consumers with intellectual disabilities. Further, for these online courses, some people were enrolled who had limited reading and writing skills, could not use a computer, and were not able to use email. We allege that AIPE failed to take adequate steps to ensure that it was not taking advantage of these vulnerable consumers.”

“It is also alleged that AIPE engaged in a pattern of behaviour that allowed sales to be made using incentives such as “free” laptops, Wi-Fi access and mobile phone credits, which involved the use of unfair tactics and failed 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.

“This is yet another reminder to colleges that prospective students need to be properly informed before they can be enrolled. Prospective students need to know that by signing up for a course they do not get a free laptop, they incur a lifetime debt,” Mr Stowe said.

Mr Sims said: “AIPE is the fourth private college the ACCC and the Commonwealth have instituted proceedings against for marketing practices which we allege breach the Australian Consumer Law. The joint investigation illustrates how seriously both agencies continue to view these allegations. The ACCC and NSW Fair Trading are continuing to investigate the conduct of other private colleges in the education sector.”

The ACCC is seeking redress for affected consumers (by cancelling VET FEE-HELP debts) and pecuniary penalties. The ACCC and the Commonwealth are seeking declarations, injunctions, orders for the repayment of course fees paid by the Commonwealth to AIPE in respect of any VET FEE-HELP loans cancelled by court order, corrective notices and orders requiring the implementation of a consumer law compliance program as well as costs.