Court finds training college AIPE operated a system of unconscionable conduct and misled consumers

28 November 2019

The Federal Court has found that training college Australian Institute of Professional Education Pty Ltd (AIPE) engaged in misleading or deceptive conduct and implemented a system of unconscionable conduct when enrolling consumers into online diploma courses between January 2013 and December 2015 under the former VET FEE-HELP loan program.

The Court found that AIPE breached the Australian Consumer Law when it told consumers their courses were free, despite the fact that consumers who enrolled would incur a debt of between $12,160 and around $20,000.

The Court ruled that AIPE implemented a system of unconscionable conduct between January 2013 and December 2015 when it:

  • offered consumers a “free” laptop as an inducement to enrol in an AIPE course;
  • failed to undertake an assessment or an adequate assessment of a consumer’s suitability for courses, including their literacy, numeracy and computer skills;
  • failed to properly explain to consumers the VET FEE-HELP debt they would incur if they enrolled in an AIPE course;
  • paid substantial commissions to third party agents and recruiters to enrol consumers in AIPE courses;
  • failed to give adequate training to its agents, failed to properly monitor them, and paid them “extraordinary” commissions for enrolments; and
  • enrolled vulnerable consumers who were unlikely to be able to complete their course.

The Court also found that AIPE breached the Australian Consumer Law in its dealings with 12 individual consumers in addition to implementing the system of unconscionable conduct.

“AIPE misled vulnerable and disadvantaged consumers into enrolling in courses which left them with large debts,” ACCC Commissioner Sarah Court said.

“AIPE enrolled consumers in around 16,000 courses and obtained over $210 million in Commonwealth funding as a result of its misleading and unconscionable conduct.”

Using new VET FEE-HELP Student Redress measures, the Commonwealth is in the process of cancelling the debts of eligible consumers enrolled by AIPE.

“We support the Commonwealth’s continuing work to cancel these students’ debts,” Ms Court said.

“This is the ACCC’s third action in which the Court has found that a VET FEE-HELP provider has engaged in misleading and unconscionable conduct.”

A hearing will be held at a later date where the ACCC will seek penalties, the repayment of funding to the Commonwealth, declarations, legal costs and other orders.

Notes to Editors

VET FEE-HELP Student Redress Measures

The VET FEE-HELP Student Redress Measures came into effect on 1 January 2019. The new measures provide a remedy for eligible students who, due to the inappropriate conduct of their VET provider, incurred debts under the VET FEE-HELP loan scheme.

If you were affected, contact the VET Student Loans Ombudsman (part of the Office of the Commonwealth Ombudsman) who will assess and investigate your complaint.

If it’s confirmed that you incurred your debt because of inappropriate behaviour by your provider, the Ombudsman may make recommendations to the Department of Employment, Skills, Small and Family Business to cancel your VET FEE-HELP debts.

As at 31 October 2019, the removal of inappropriate VET FEE-HELP debts of over $493 million for around 38,000 students has been approved by the Commonwealth.

Background

The ACCC and the Australian Government Department of Education and Training commenced proceedings against AIPE in March 2016 following a joint ACCC and NSW Fair Trading investigation.

AIPE was a provider of VET FEE-HELP diploma courses which cost between $12,160 and approximately $20,000. It marketed these courses using face-to-face marketing and telesales.

AIPE was placed into liquidation after the ACCC commenced proceedings.

The ACCC and the Commonwealth have previously obtained judgments against Unique International College, Cornerstone Investments Aust Pty Ltd (trading as Empower Institute) and Acquire Learning.

The ACCC has ongoing proceedings against the following private colleges:

Release number: 
224/19
ACCC Infocentre: 

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