Careers Australia undertakes to repay Commonwealth for VET FEE-HELP diploma courses

The Australian Competition and Consumer Commission has accepted a court enforceable undertaking from Careers Australia Group Limited (Careers Australia), following concerns about its marketing of VET FEE-HELP courses.

The ACCC was concerned and Careers Australia now admits 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 (ACL). 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. 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,” ACCC Chairman Rod Sims said.

“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 1 August 2013 and 31 March 2015, Careers Australia received and processed applications from around 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.

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 ACL Compliance Program, including training for staff and regular reviews, and
  • not engage in the conduct of concern in the future.

Careers Australia has since cancelled at least 12,130 of these 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. In addition, 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 cooperated with our investigation and worked to address the problems, which is why we have accepted the undertaking rather than taking court action. 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,” Mr Sims said.

The ACCC is working closely with other Commonwealth and State agencies to address problems in the VET FEE-HELP sector. In this matter, the NSW Department of Fair Trading provided complaint information and assisted through its participation in a Joint Taskforce.

Background

The ACCC has taken action in the Federal Court against four other private colleges:

http://www.accc.gov.au/media-release/accc-takes-action-against-aipe-following-a-joint-investigation-with-nsw-fair-trading

http://www.accc.gov.au/media-release/accc-takes-action-against-empower-institute-following-joint-investigation-with-nsw-fair-trading

http://www.accc.gov.au/media-release/accc-takes-action-against-phoenix-following-joint-investigation-with-nsw-fair-trading

http://www.accc.gov.au/media-release/accc-takes-action-against-unique-international-college-following-joint-investigation-with-nsw-fair-trading

 

 

Source: ACCC

Dale Bothe

AusRealNews.com.au editor

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisment ad adsense adlogger