Education Provider Fined $250,000 for Illegitimate Enrolments
An education provider, Captain Cook College, has recently faced the Federal Court for proceedings brought by the ACCC. Its director, Mr Cook, was slammed by the Court and ordered to pay $250,000 in penalties, a contribution towards the ACCC’s costs and prohibited from managing a company for 3 years.
This case is the latest of high-profile proceedings brought by the ACCC against education providers who took advantage of Commonwealth subsidies. Back in 2015, the government were providing incentives to education providers who signed up consumers in the VET FEE-HELP program.
In September 2015, Captain Cook College’s financial performance drastically improved. This was a direct result of it removing consumer safeguards from its enrolment and withdrawal process in its online courses. The ACCC claimed that during this time, the College enrolled students who were ‘vulnerable and disadvantaged’ and were unlikely to complete or receive a benefit from completing the course. From these consumers, a whopping 86% of them never even logged in to access the course material.
The Court found that this amounted to unconscionable conduct and making false or misleading representations. Interestingly, the College’s parent company and former chief operating officer are on the hook for being knowingly concerned with the change in process. Their penalties will be decided at a later date.
It’s expected that more cases will be brought by the ACCC against education providers who took advantage of the VET FEE-HELP program. Although this is the fourth case against a VET-FEE Help provider, more than 2.8 billion in VET FEE-HELP debt has been re-credited since 2019. This means there is still a lot of money for the government to recoup.
If you need advice regarding your obligations to your clients or are concerned that you have engaged in unconscionable conduct, please contact one of our experienced commercial lawyers at Taurus Legal Management on (03) 9481 2000 or firstname.lastname@example.org.