For-profit providers face court in crackdown

Authorities drill into questionable practices of colleges

Legal action has begun in the Federal Court against two private training colleges following a joint investigation by NSW Fair Trading and the Australian Competition and Consumer Commission (ACCC).

In separate court actions, the ACCC and the Commonwealth (on behalf of the Department of Education and Training) allege Unique International College Pty Ltd and Phoenix Institute of Australia “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”.

An ACCC media release alleges that between January and October 2015 Phoenix “enrolled more than 9000 students in 17,000 courses (most enrolled in double Diplomas) and was paid in excess of $100 million by the Commonwealth for those enrolments”. The proceedings relate to the marketing and selling of VET FEE-HELP courses between those dates.

Allegations include that Community Training Initiatives “assisted Phoenix by providing administrative support and processing the enrolment forms”.

ACCC chairman Rod Sims said: “We allege this conduct targeted some of the most vulnerable 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 could not use a computer, and were not able to email. Not surprisingly, course commencement rates were extremely low.”

In regards to Unique International College, a separate media release alleges “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”.

Mr Sims said Unique International College “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.”

Vocation contracts cancelled

The NSW Government has terminated private training company Vocation Limited’s Smart and Skilled contracts.

They relate to Vocation’s Training and Development Australia Pty, Avana Learning Pty Ltd and Real Corporate Partners Pty Ltd (trading as Real Institute).

The public announcement followed Vocation announcing on November 25 that it had appointed voluntary administrators.

On November 30 the administrators announced that as a result of "customer contract terminations, the lack of available liquidity to fund operations and the lack of the ongoing support from key stakeholders" they had "no alternative but to cease the majority of the company's operations".

The administrators said that as a consequence they had "terminated approximately 150 staff across the business".

In 2014 Vocation was forced to pay back $19.6 million to the Victorian Government and relinquish contracts for two of its registered training organisations after a government audit.