The ACCC has instituted Federal Court proceedings against Productivity Partners Pty Ltd, trading as Captain Cook College, alleging systemic unconscionable conduct in breach of the Australian Consumer Law.
The ACCC alleges that from 7 September 2015, Captain Cook College removed consumer safeguards from its enrolment and withdrawal processes for online courses to improve its financial performance.
"We allege that Captain Cook College engaged in systemic unconscionable conduct designed to maximise profit at the expense of their students," ACCC Commissioner Sarah Court said.
"We are very concerned by Captain Cook College’s decision to make process changes that we will submit removed consumer safeguards. We allege that this significantly reduced the College’s ability to detect misconduct by its sales agents and assess a consumer’s suitability or participation in the course they had been enrolled in."
"We further allege that the removal of consumer safeguards increased the number of students that Captain Cook College enrolled and who remained enrolled, allowing the College to increase VET FEE-HELP payments from the Commonwealth," Ms Court said.
Approximately 5,500 affected consumers whose enrolment was processed during the period from 7 September 2015 have VET FEE-HELP debt, totalling over $60 million. Around 98% of those 5,500 consumers failed to complete any part of the course they were enrolled in, and around 86% never even logged in to their online course.
In these proceedings, it is also alleged that Captain Cook College made false or misleading representations, engaged in unconscionable conduct and failed to provide unsolicited consumer agreement protections in its dealings with four individual consumers.
The ACCC has also alleged that Ian Cook (former Captain Cook College CEO), Site Group International Limited (Site, the parent company of Captain Cook College) and Blake Wills (former COO of Site) were knowingly concerned in Captain Cook College’s systemic unconscionable conduct.
"We will not hesitate to take appropriate action against businesses and executives who treat consumers unconscionably in breach of the Australian Consumer Law," Ms Court said.
The ACCC is seeking pecuniary penalties, declarations, corrective notices, adverse publicity orders, finding of fact orders and orders requiring the implementation of a consumer law compliance program, as well as costs. The ACCC is also seeking orders disqualifying Ian Cook and Blake Wills from managing corporations.
Consumers with concerns about their VET provider can contact the VET Student Loans Ombudsman at www.ombudsman.gov.au/vslo and complete the online complaint form.
Legislative consumer redress mechanisms
There is currently a legislative mechanism available under the Higher Education Support Act 2003 (Cth) (HESA) to cancel VET FEE-HELP debts of consumers enrolled from 1 January 2016 if they were affected by "unacceptable provider conduct", and satisfy other legislative criteria. No such mechanism currently exists for consumers enrolled before this date.
Australian Government announcement on 20 September 2018
On 20 September 2018, the Australian Government announced that it would introduce legislation to amend the HESA to allow for the cancellation of VET FEE-HELP debts of consumers that were affected by "inappropriate provider conduct", including those who enrolled prior to 1 January 2016. More information on the Australian Government’s proposed legislation can be found at the Australian Parliament Website.
Background
Captain Cook College offered VET FEE-HELP funded courses from 2012 to 2016 which, during the period of the alleged conduct, ranged from $13,000 to $20,000.
Under the VET FEE-HELP Scheme, the Commonwealth made payments to Captain Cook College to discharge the consumer’s obligation to pay the tuition fees for their course. The consumer then became liable to the Commonwealth for the tuition fees plus a 20% loan fee, collectible once the consumer earned over a minimum income threshold.
The alleged systemic unconscionable conduct affected students whose enrolment in Captain Cook College’s online courses was processed between 7 September 2015 and 18 December 2015.
Captain Cook College was established in 1998, and was acquired by Site (ASX:SIT) in 2014.
The ACCC has taken action against a number of other VET-FEE HELP providers. These include:
- Unique International College Pty Ltd
- Cornerstone Investment Aust Pty Ltd trading as Empower Institute
- Australian Institute of Professional Education Pty Ltd
- Phoenix Institute of Australia Pty Ltd and Community Training Initiatives Pty Ltd
- Careers Australia Group Limited
- Australian Vocational Learning Centre Pty Ltd
The ACCC also took action against Acquire Learning & Careers Pty Ltd, who marketed VET FEE-HELP courses.
